Oral Answers to Questions

CULTURE, MEDIA AND SPORT

The Secretary of State was asked—

Music (Young People)

John Robertson: If she will make a statement on the Government's strategy for promoting music among young people.

Estelle Morris: On 6 July this year, along with my hon. Friend the Minister for School Standards, I launched the music manifesto, which sets out our shared aims for music education for the next three to five years.
	Over 150 music organisations have become signatories to the manifesto, including Youth Music, a national charity set up in 1999 with £10 million per year of national lottery funding, and the Sage, the landmark music centre in Gateshead, which is due to open before Christmas.

John Robertson: I know that my right hon. Friend is aware that various other organisations try to help with the music manifesto—for example, the "Respect the Value of Music" campaign recently launched by British Music Rights. Does she agree that we should be educating young people about the value of the creativity involved in making music? What steps will the Department take to support campaigns such as "Respect the Value of Music", which are so important for ensuring that the creators of music can make a living in the years to come?

Estelle Morris: I congratulate British Music Rights on the part that it played in the music manifesto, and my hon. Friend on the contribution that the all-party music group has made in both Houses of Parliament to heighten the importance of music and give everybody some fairly good nights out into the bargain. Music in the United Kingdom is strong. There are many music venues and a feeling that music has never been as good as it is now, but there is one threat on the horizon. We must make sure that everybody uses and accesses music in a way that protects the copyright of those who write it. Especially now, with young people having access to music online at no charge if they choose to take it, it is important that we run an education programme. I join my hon. Friend in congratulating British Music Rights on its music education programme. From what I have seen of it, it is very good and I wish it well as it is introduced.

Sydney Chapman: Does the Minister agree that in order to turn that verbal aspiration into reality, it is necessary to provide a time scale for achieving it? She mentioned three to five years. Even five years would be a good aim. Will she take on board a further point? Quite often, all it needs to encourage more primary school children to take up a musical instrument is for schools to copy the practice of the best schools. If they can do that, they are well on their way to achieving a commendable objective.

Estelle Morris: I have no problem with what the hon. Gentleman says. We hope to make real progress in three to five years. It is important that we monitor what works. His comment about learning which school is doing something well and spreading it to other schools is well made. He will know that there are a number of initiatives spread throughout the country, none of which are universal in themselves, but all of which are trying different ways of engaging young people with music—for example, through the activities of the Music Standards fund, the Arts Council music fund, Youth Music and organisations such as Creative Partnerships. In three to five years we should know which of those initiatives have been most successful at engaging young people with music, and making sure that they are properly funded at that point so that they can be rolled out nationally.

Dari Taylor: In my constituency, I have many young people who excel at classical music, pop and jazz, both vocal and instrumental. How is the Department encouraging businesses to financially support the development of those young people? What is the Department doing to make sure that those businesses feel included in such partnerships?

Estelle Morris: The role of business is important. We will never get to a situation, nor should we, where the arts receive funding only from the Government, centrally and locally. It is important that all sections of society contribute to something so central to our lives. With my hon. Friend, I recognise the contribution that business has made in constituencies outside London and in London. As regards the Department's involvement, through the Arts Council, we fund Arts and Business, which has the express task of making sure that businesses offer as much to arts and music as they can. If my hon. Friend wants to know more about that, she should look at the details of what Arts and Business has achieved, and she will see that it is a steadily growing amount. I take the opportunity to thank Arts and Business for its business sponsorship, and all businesses for the money that they put into the arts.

Hugo Swire: This summer, the Minister launched the music manifesto and announced the appointment of a music champion. One of the manifesto's aims was to
	"provide every young person with first access to a range of music experiences".
	That is a laudable aim, though a rather vague one. Just over 6 per cent. of pupils take up an instrument at key stage 2. The manifesto commits no extra resources to addressing that fundamental problem. Surely the best place to promote music among young people is in schools, where it should have dedicated timetabling and be properly funded by the Department for Education and Skills, rather than being left to a music champion who works only part time and the odd headline-grabbing initiative from the Department for Culture, Media and Sport.

Estelle Morris: I congratulate the hon. Gentleman on his appointment to the Front Bench. I hope that he stays there longer than his predecessor.
	I am not sure why the aim of ensuring that every child has the opportunity to play a musical instrument is vague. I should have thought that it was among the most concrete of the Government's objectives and that we knew exactly what it means. Much progress has been made. Over the past three years, in conjunction with the Department for Education and Skills, we have put extra money into schools enabling us to run pilots. If the hon. Gentleman is interested, the results of the pilots, which were run by Youth Music, were published earlier this year. My colleagues in the Department for Education and Skills have now announced that local authorities will have dedicated money to ensure that they can carry through the best results of the music partnerships.
	That is real progress that has been properly funded; it is doing something that was not funded before and making a real difference to children's lives. I remind the hon. Gentleman why it might take longer than he wants to make universal provision. In 18 long years of Tory government, music services in schools in all counties were run down. We started from scratch, and we have a record to be proud of.

ITV Regional Companies

Anne McIntosh: If she will make a statement on the provision by independent television companies of regional news.

Tessa Jowell: I recognise the level of interest in this issue from all parts of the House.
	The Government are committed to strong regional public service broadcasting, including regional news. The Communications Act 2003 requires Ofcom, the regulator, to determine appropriate levels of regional programming, including news, for ITV1. I note that the second phase of Ofcom's public service broadcasting television review, on which it has just consulted, proposes to maintain the level of ITV regional news obligations at five and a half hours a week.

Anne McIntosh: I thank the right hon. Lady for that answer, but may I ask what guarantee there is beyond the election that there will be that level of local and regional coverage from excellent companies such as Yorkshire Television and Tyne Tees Television? What role will the new body, the public service publisher, have in the digital age? Could it lead to job losses in such companies within ITV?

Tessa Jowell: The answer to the hon. Lady's first question is that the requirements on news will be written into ITV licences. It will be an obligation that they will have to meet. On her second question about the public service publisher, Ofcom has raised the proposal in itssecond public service television review. The Government think that the proposal is interesting, and it makes a strong case for maintaining the current value of public service broadcasting, but we have not yet determined a decision on it. There will obviously be a further period of consultation once Ofcom's proposals become clearer.

Austin Mitchell: While I welcome the slight withdrawal by Ofcom of its original proposals, does my right hon. Friend accept that the principal concern for those of us who represent the civilised part of the country, which is mostly outside London and basically in the north, is that there should be no reduction in either local service or local news? To reduce those services would be damaging to the regional roots of the companies that produce them and also allow the cut-down of regional newsrooms and regional staff at a time when they need to be expanded to face the enhanced competition that the BBC is giving in regional coverage.

Tessa Jowell: I thank my hon. Friend for that question. He is absolutely right about the importance of maintaining support for local and regional news. That is why I welcome very warmly the Ofcom recommendation in this area. It is also worth noting that the Ofcom report was based on extensive consultation with the public. It was the public—the people who were interviewed—who gave regional television news a ringing endorsement.

Don Foster: I welcome the fact that the Secretary of State is properly linking regional programming with regional news and recognising the importance of both, but when the Leader of the House said 10 days ago that the proposed regional programming cuts by ITV Wales were unacceptable, was he speaking personally or on behalf of the Government?

Tessa Jowell: I suspect that the Leader of the House was, like many hon. Members, reflecting constituency concern about that issue. It is important to make the position absolutely clear: Ofcom has no proposals that ITV should cut regional news; there are proposals to cut the current requirement for three hours a week of non-peak, non-news programming to one and a half hours in order to meet the licence conditions. That is not a requirement, but it would lessen the regulatory burden on ITV.
	In reaching a conclusion on the matter, I say to hon. Members that ITV faces increasing competition with the increased take-up of digital television. It is losing audience share, and with that it is losing the advertising revenue that a high level of audience share brings. It is an inescapable fact that ITV cannot continue to broadcast at its current level of operation. The Ofcom analysis is important because it rests on the views of viewers—the people who watch television—rather than on any other interest. That context has shaped the conclusions, which are currently out for consultation.

John McDonnell: When the digital replacement licences were granted to ITV companies, the ITV companies were required to provide regional news and current affairs until 2014, but Ofcom now states that that will be required only until 2007. Will the Secretary of State make it clear to the regulator that we expect it to do its job in maintaining the commitments of the licence until at least 2014?

Tessa Jowell: My hon. Friend will recognise that the negotiation of the licences with ITV continues. However, the message to both Ofcom and ITV is that hon. Members on both sides of the House on behalf of their constituents recognise and insist on the importance of high-quality regional news and current affairs and factual programming.

Dave Watts: Is it not the case that Ofcom has already failed and that the quality of news broadcasting in the regions has diminished over the past few years? Will my right hon. Friend make sure that Ofcom fulfils its responsibilities and makes sure that both the hours of news and the quality of news are maintained?

Tessa Jowell: I agree that that is an extremely important part of Ofcom doing its job properly.

Swimming Pools

John Randall: What plans he has to increase the number of 50 m swimming pools.

Richard Caborn: There are currently 20 50 m swimming pools in England. Sport England lottery funding bids have been submitted to build four additional 50 m pools in Sunderland, Leeds, Liverpool and Portsmouth. Sport England is also working with the Greater London authority, the London Development Agency and the London 2012 Olympic bid on a new aquatics centre in Stratford, which will include at least one 50 m pool. If the 2012 bid is successful next year, the facility will be increased to two 50 m pools.

John Randall: That was an interesting answer from the Minister. He will be delighted to know that we plan to get a 50 m pool in Uxbridge—at the moment, we have worked-out plans for a 25 m pool. Does he agree that a 50 m pool is better than a 25 m pool? Will he come to Uxbridge at my invitation and have a look at those plans?

Richard Caborn: I would love to take up that invitation. The hon. Gentleman is right to say that a 50 m pool is far better than a 25 m pool. Yesterday I was delighted to read the headline of a Tory press release, which said "Conservatives launch new policy to boost sports provision for the young". They spent 18 years shutting all those facilities—at their height, about 40 a month were going—but as my mum might say, if a sinner repents they are welcome to come and join us.

Kate Hoey: I welcome the move towards more 50 m swimming pools. As the Minister knows, Paris has more 50 m pools than the whole of this country. Will he give me his views on the London pools campaign, which is concerned about the increasing numbers of swimming pools that are closing down? We lose one a year, and there seem to be no proposals to deal with that apart from a new aquatic centre were we to win the Olympic bid. What are we going to do about swimming in the rest of London?

Richard Caborn: Swimming has had more lottery money invested in it than any other sport. There are some 3,484 swimming pools in England, which make adequate provision, through the public and private sector, for those who want it.
	The difficulty concerns 50 m pools. We have a 50 m pool in my city of Sheffield, but competitive use takes up a very small part of its time—it is invariably divided into three swimming pools for the community. There is always a dilemma as to whether a 50 m pool is used for elite swimming or what the community want to use it for, and Sheffield's pool is no exception.
	I can clearly state that there is adequate provision for swimming, which is supported by many local authorities who are investing in free-of-charge facilities for their young people, as well as by increased private sector provision. However, a problem remains in relation to 50 m pools, and we are trying to deal with that.

Nick Hawkins: The Minister knows of my involvement in swimming as a sport, and I recognise that, as he says, there has been a big expansion in the number of pools provided. However, does he accept that there are big issues to do with the funding of swimming generally in the light of the very worrying suggestion that, because our swimmers did not get as many medals at the Olympics as had been expected, there might be a substantial reduction in funding not only for pools but for other sorts of elite swimming? Will he agree to meet me and representatives of the Amateur Swimming Association? Does he recognise that the recent great success at the short course world championships shows that competitive swimming in this country is in a very healthy state?

Richard Caborn: I agree that competitive swimming in this country is in a healthy state. Since the lottery fund started, it has invested £297 million in swimming, which is the highest amount that has been given to any such recipient.
	In Sydney, we probably did as badly in competitive swimming as at any time, but within two years, having brought in a new coach from Australia, our swimmers got the best results in international swimming in Tokyo. They then went to Athens, where they took two medals and got into 16 finals. That remarkable improvement on Sydney—by any standards—was down to the way in which lottery money was invested, coaching, and the responsible attitude of the governing body.

Bill O'Brien: I want to express thanks and appreciation to my right hon. Friend for the support that he gives local authorities in the development of swimming pools and for the time that he took to come and officially open the swimming pool in Normanton. Does he accept, however, that there are still pressing needs for swimming pools? The communities of Ossett and Horbury in my constituency are appealing for support in obtaining a pool to serve them. Will my right hon. Friend pledge any such support that he can?

Richard Caborn: Obviously, we will consider any application that comes in. My hon. Friend and I had an exceptionally pleasant day at the pool, although we resisted jumping into it to do a little exhibition of synchronised swimming, as I think people wanted us to. That pool is now serving the community in terms of health, as well as other benefits. I will give my hon. Friend as much assistance as possible in any extension of that.

Hugh Robertson: In order to meet such demand, the Amateur Swimming Association trains, remarkably, 12,000 swimming coaches each year, but says that it faces significant difficulties with the cost of training, insurance and child protection measures. What assistance can the Minister offer it, particularly given that it is denied access to Learning and Skills Council funding because it comprises volunteers?

Richard Caborn: That is a serious issue, not only for swimming but for sport in general. Indeed, it affects not only sport but volunteering. We are a more litigious society and have become incredibly risk averse. That has had an impact on sport, and, as the hon. Gentleman said, it is a serious matter. Together with my colleagues in the Home Office, we are considering how we can deal with that in sport. The Department has held a series of meetings with governing bodies and insurance companies.
	I shall not say that there is an easy fix—there is not. A few months ago, Parliament considered a private Member's Bill on the subject. It needs addressing and I hope that we can reach some conclusion because if we do not, in my view, our young people will be exposed to more harm from some activities in inner cities than they would ever encounter through performing sport.

ITV Regional Companies

John Grogan: If she will make a statement on the recent Ofcom report on public service broadcasting as it relates to ITV regional companies.

Tessa Jowell: Ofcom has proposed that ITV 1's requirement to provide non-news regional programming for the English regions should be reduced from three hours to one and a half hours a week. Quotas for regional network production would be increased from the current 30 per cent. requirement to 50 per cent. As I said earlier, no reduction has been proposed in the current regional news obligation of five and a half hours a week for regional programming.

John Grogan: Does my right hon. Friend agree that, given Ofcom's statutory responsibility to maintain and strengthen public service broadcasting, it is a bit odd that, a full eight years before digital switch-over, it proposes to reduce by half regional companies' obligations to produce non-news programming? Is not there a genuine danger, especially given that Ofcom is negotiating with ITV nationally to reduce its licence payments, of the body's being perceived as a soft touch in its defence of ITV regional programming?

Tessa Jowell: I do not accept that. The key issue is safeguarding regional programming as part of the public service broadcasting offer that ITV makes. It is important that, in addition to regional news, the requirements for non-news programming deliver what people in the regions want. If my hon. Friend examines the Ofcom report and the extensive data on public consultation that it provides, he will realise that public satisfaction throughout England with the non-news programming is approximately 7 per cent. In the Granada region, the figure is 5 per cent. That clearly means that something needs to be improved. The message is that we need strong regional broadcasting as part of delivering a strong public service broadcasting offer. The ITV companies must respond to what their viewers want.

Nigel Evans: I heard what the Secretary of State said on the guarantees about the news programming. Does she accept that nowadays, BBC World, Sky News, CNN, Fox News and rolling world news mean that the public have a great choice, but that that does not apply to local news? That is why it is important that regional news is not only maintained but increased, if possible. Will she give a guarantee that, if at any stage a recommendation is made to reduce the hours for regional news, she will step in and ensure that they are protected?

Tessa Jowell: I would not want to pretend that I have powers of intervention on that aspect of regulation; I do not. However, I have made the position clear, and it is clear to Ofcom and ITV through the strength of feeling in the House and the many signatures on the early-day motion that my hon. Friend the Member for Selby (Mr. Grogan) tabled. There is also a message to the BBC, as we consider the review of its charter, to examine not only the important role of ITV regional news but that which an increased BBC presence in the regions could play.

Derek Wyatt: Does my right hon. Friend agree that major ITV shareholders say one thing in public about their public service broadcasting remit but an entirely different thing to the City? If ITV does not want to fulfil the PSB commitment, has she considered including in the charter renewal a BBC 3 proposal for regional television? That would mean that each region would have 24-hour regional broadcasting, thus enhancing a huge cultural change in the regions.

Tessa Jowell: No detailed conclusions have yet been reached on that specific proposal. However, it is possible that, as more people move to digital by choice, and as spectrum is released, new channels could be created, and consideration should certainly be given to my hon. Friend's proposal at that time.

Angus Robertson: May I draw to the Minister's attention the fact that detailed proposals for Scotland, Wales and Northern Ireland have yet to be published? Worryingly, Ofcom states that
	"many of the same considerations apply",
	namely that, from 2007, there will be no requirement for ITV companies to produce regional or local news. If the Minister does not take this matter seriously, would she consider devolving responsibility for broadcasting?

Tessa Jowell: No, I do not intend to recommend the devolution of matters relating to broadcasting, because I take them very seriously indeed. It is important that, as part of our UK identity, we have a national approach—a UK-wide approach—to broadcasting. The hon. Gentleman will no doubt have noted Ofcom's specific recommendations on Gaelic and Welsh language broadcasting.

Lawrie Quinn: Will my right hon. Friend join me in congratulating the producers of the many programmes from Tyne Tees Television and Yorkshire Television? They produce strong regional TV that finds favour not only with my constituents but with people in the rest of the north-east of England and Yorkshire. Will she urge representatives of Ofcom to come to the House to meet the constituency MPs from those areas to discuss the strong regional identity in that part of England, rather than trying to hide behind her and her office near Trafalgar square? They should come to the House and listen to constituency MPs' strong sentiments about these services.

Tessa Jowell: I thank my hon. Friend for that question. Yes, the chairman and chief executive of Ofcom could and should make themselves available to MPs in order to discuss these matters. I understand that the managing directors of each of the ITV regions have either met or are in the process of arranging meetings with every constituency Member of Parliament in order to discuss this issue, and I know that the chief executive of ITV has made a similar offer. It is important that these discussions should take place, because what is at stake is not the status quo in regional broadcasting but clear safeguards relating to high-quality investment in news. It is important to engage in a debate with ITV about the kind of programming that our constituents want and that reflects the areas that we represent and in which we live.

Gambling Bill

Alistair Carmichael: What measures the Gambling Bill includes to prevent the proliferation of category A gaming machines.

Richard Caborn: We propose that category A machines should be allowed only in regional casinos, and that there should be only eight regional casinos in the first phase.

Alistair Carmichael: I thank the Minister for that answer. As I understand the Bill, clause 56 reserves to the Government powers to deal with problems that might be caused by the use of category D machines, which would include machines such as penny slides. However, there is no equivalent provision for category A machines. If the Government are concerned about dealing with problems arising from the use of penny slides, why are they not concerned about problems arising from the use of machines that would have large stakes and unlimited payouts?

Richard Caborn: We will take those powers. Indeed, we have limited the number of regional casinos to eight, and they will be used to see what the effects of their introduction will be over a period of time. The situation will be reviewed by the gambling commission, and we have made it clear that it will be up to the House whether to proceed with establishing any further casinos. In the real world, the category A machines will be limited to about 10 or 20 per cent. of the total number of machines in the casinos. That is what happens internationally. In this country, the highest paying machines are category B1 machines. There are about 1,000 of those, of which only a third pay out the maximum sum of £2,000. The operators clearly keep those machines at well below the maximum payouts, both internationally and in this country, and we believe that, with those safeguards in place, the experiment can take place. We will then evaluate it and bring the matter back to the House.

Gwyneth Dunwoody: Is the Minister aware of the grave disquiet about these machines, and the extension of gambling in this manner? The proposals disturb not only those who must deal with the enormous problems that gamblers can create, but those who feel that the general protection of the public is being relaxed far too readily.

Richard Caborn: I do not accept that. The Gaming Act 1968 was probably one of the most draconian examples of gambling legislation, especially in respect of casinos, but if my hon. Friend looks at the remit of the new Gambling Commission, she will find that we have put a large amount of the 1968 Act into it. We have tried to make integrity, transparency and fairness to punters a major part of the Bill.
	I remind my hon. Friend that during pre-legislative scrutiny it was recommended that category A machines should go into large casinos as well, but we rejected that proposal. We have limited those machines to regional casinos, of which there will be eight. We did that in response to a feeling in the House that we wanted too many of them, just as my right hon. Friend the Secretary of State said that we would. We expect the eight regional casinos to be properly evaluated, and we will report to the House before any steps are taken towards expansion.

Creative Partnerships

Meg Munn: If she will make a statement on the progress made by creative partnerships and the Government's plans to offer a universal cultural entitlement to all children and young people.

Estelle Morris: Twenty-five creative partnerships have been established, with a further 11 due to start in September 2005. By November 2004, there had been over 217,000 attendances by children and young people at more than 2,500 projects.

Meg Munn: My neighbours in Doncaster, Rotherham and Barnsley have a creative partnership that provides excellent events for children at such places as the Yorkshire sculpture park and Magna. I should like one in Sheffield, but failing that, what is my right hon. Friend doing to encourage others to ensure that children and young people take advantage of existing cultural events?

Estelle Morris: I am pleased that my hon. Friend is seeing good work being done by creative partnerships. It is an excellent initiative at ground level, with each partnership finding its own way of spending money while also ensuring that artists are introduced to children in schools. I am happy to say that by September 2005 there will be a creative partnership in Sheffield. I understand that a director has already been appointed, and is putting together a partnership board. I am sure that he would be more than willing to have a conversation with my hon. Friend.
	We never envisaged every local authority becoming a creative partnership, but we are keen to learn from this experience so that in time we may be able to announce a universal cultural entitlement.

Theatre (North-west)

Helen Jones: What steps she is taking to sustain and develop theatre in the north-west.

Estelle Morris: Along with theatres across England, theatres in the north-west have benefited from the sustained extra investment that followed the 2001 theatre review. In the first tranche of the funding, theatres in the north-west received £8,084,150, which will rise to £8,352,139 this year.

Helen Jones: I am grateful for that answer, but what is my right hon. Friend doing to encourage theatre performances in towns such as Warrington that have no theatres of their own? Will she do more to encourage national companies to visit such towns, and put on more successful productions like the one by the Royal Shakespeare Company that we saw last year in Birchwood, in my constituency? What is she doing to support the Pyramid arts centre in Warrington, so that we can see more performances there?

Estelle Morris: I agree with my hon. Friend that impressive statistics showing that theatres have received more money do not mean much if constituents cannot go to them. Sadly, not every town has its own theatre. As my hon. Friend says, innovative ideas—such as making more money available for touring theatres—would help people in Warrington, and in other constituencies. Theatres in Liverpool, Manchester and Chester have already benefited from extra money for touring over the past few years. I understand that Warrington has also benefited, and has enjoyed performances that might not have been possible without that increased funding.
	The Pyramid arts centre receives a £21,000 grant—not as much as some projects, but enough, I hope, to sustain it and enable it to serve the people of the town.

Peter Pike: Does my right hon. Friend recognise that Burnley council, given its small non-unitary authority budget, finds it very difficult to maintain the Mechanics theatre and arts centre? Is my right hon. Friend aware that councils such as Burnley that are committed to arts funding find it extremely difficult to meet that commitment with a small budget?

Estelle Morris: I acknowledge my hon. Friend's point: local authorities are huge investors in the arts, second only to central Government—I believe that they contribute more than £200 million. Local authorities of different sizes face budget pressures and have to make important decisions. Sometimes, the levers are there to spend the money on certain services, which may not include the arts, theatres or culture. That is something that, over time, the Government will address because it is clear that creativity, culture and theatres are central to local communities. Without that provision, we end up with the sort of estates that we built in the 1960s, when we built houses for people to live in but no culture for them to enjoy. The irony is that we are now knocking down those estates, as we knocked down estates at the start of the 20th century.

Television Licence

Gordon Prentice: Whether it is her intention to discount the BBC licence fee for licence holders who cannot receive BBC digital services.

Tessa Jowell: It is not my intention to discount the BBC licence fee for licence holders who cannot get BBC digital services. Rather, my intention is to accelerate the process and preparation for digital switchover, so that all can receive that service.

Gordon Prentice: Well, that is a bit disappointing because 27 per cent. of the population cannot get digital terrestrial services but they pay 100 per cent. of the licence fee. If that state of affairs were to continue for a year or two, that would perhaps be acceptable, but, with digital analogue switchover to be completed by 2012, that is asking an awful lot of people who cannot get digital services.

Tessa Jowell: I accept the sentiment behind my hon. Friend's comments. It is precisely because of the limited range of digital terrestrial television at the moment—only 73 per cent. of the population can access DTT—that we maintain as a principle the policy of platform choice, so that his constituents who are unable to get DTT may opt for another platform, either cable or satellite. However, I entirely accept his impatience. The public want more digital television. The process of digital switchover has real momentum, but we will proceed on the basis of the broadcasters' judgment on when it will be technically right to undertake switchover region by region. They are currently charged with providing that advice to us.

Peter Atkinson: The Secretary of State will realise that there is considerable resentment felt by those who cannot receive digital terrestrial television and will not be able to receive it except by satellite. Will she do her best to ensure that there is a new free-to-view satellite service, so that people in rural areas in my constituency who will not be able to receive digital television until the switchover can at least be offered the satellite option at no cost?

Tessa Jowell: The short answer is yes. We have already had discussions with the BBC about that, and I know that Sky is also looking at that option. As the hon. Gentleman says, for a small number of people in isolated communities, satellite will be the only option but two principles drive this policy for Government. The first is ensuring universal access, and DTT is the most effective way of doing that, and the second is ensuring affordability. With the reduction in the price of the set-top box, DTT is set to make a free-to-air offering of up to 29 or 30 channels for people, without any additional subscription cost.

John Whittingdale: The Secretary of State is on record as saying that she regards it as inconceivable that the licence fee might be replaced as a source of funding for the BBC. How, then, does she react to the preliminary report of her adviser, Lord Burns, who said that the growth of digital channels and multi-channel television will make the licence fee unsustainable and that it should be reviewed in five years?

Tessa Jowell: With great respect, I do not think that I have ever described the likelihood of the licence fee being replaced as "inconceivable". I have certainly said that I think it unlikely, improbable and so forth. [Hon. Members: "Hear, hear."] I am glad to hear the chorus of approval welcoming that fact.
	Lord Burns's report, which is published on the website, as all charter review material is published in the spirit of openness and transparency, describes the licence fee as the least worst option, alongside an evaluation of alternatives. The hon. Gentleman will no doubt also look at what the public said about the licence fee. When faced with the alternatives, they decided that they liked the licence fee best of all.
	The critical question, however, is what funding will give the BBC the greatest certainty and the best capacity, first, to maintain the high-quality wide-ranging programme content that people want and, secondly, to equip it best financially to deliver its leadership role in digital switchover. For those reason, paths lead back to the licence fee, at least for the next charter.

Mr. Speaker: Order. May I appeal to the Secretary of State to give shorter replies at the next Question Time because we are now going into injury time?

National Railway Museum

Hugh Bayley: What grant-aid her Department gives to the National Railway museum in York.

Estelle Morris: The National Railway museum is a branch of the National Museum of Science and Industry. Although we grant aid the NMSI, it then makes its own judgment about the grant-in-aid that it allocates to the National Railway museum, which received £6.1 million this year from the NMSI.

Hugh Bayley: My right hon. Friend is committed to broadening access to culture and heritage. Is she aware that the National Railway museum has almost doubled attendances since the Government removed admission charges and, at 40 per cent., gets more social class C2, D and E visitors than any other national museum, yet receives less funding from her Department than most other national museums? Will she address that in her forthcoming funding announcement? Will she find a date when she can come to York to discuss with the museum director what the museum is doing for the region and the nation?

Estelle Morris: I agree that since free admissions were introduced it is good to see an increase in visitors to all the museums that used to charge. The statistic that my hon. Friend quotes is pretty similar for all museums in that category. I would argue a little about the increase in grant. I am not sure that the museum has received a smaller grant than others. It is about 22.9 per cent. I accept, however, that that includes money to enable free admissions. We hope to continue investing in the arts, including museums, and further announcements will be made in due course when we announce the results of the spending round.

CHURCH COMMISSIONERS

The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—

Redundant Churches

Gordon Prentice: How many redundant churches have been converted to other uses in each of the last three years.

Stuart Bell: Thirteen in 2001, 28 in 2002 and 30 in 2003.

Gordon Prentice: These are significant figures. It is always sad when churches close because the congregations go away and disperse, but are there any inappropriate uses to which those redundant churches will not be put? Can my hon. Friend give me some examples?

Stuart Bell: That is a double negative. First, the use of redundant churches must be by another Christian body or for wider community purposes that are generally regarded as most suitable. In terms of the second negative, the commissioners usually impose covenants on the new owner of a redundant church, restricting its use to that approved under statute and prohibiting any unauthorised architectural or structural alterations, demolition and the disturbance of human remains.

ELECTORAL COMMISSION

The hon. Member for Gosport, representing the Speaker's Committee on Electoral Commission, was asked—

Postal Voting (Fraud)

Simon Hughes: What steps the Electoral Commission is taking to prevent fraud in postal voting.

Peter Viggers: The Electoral Commission has produced several reports and made a number of recommendations for changes in the law relating to postal voting, and looks forward to the Government's response in due course. It is also working with relevant authorities to develop best practice to combat fraud.

Simon Hughes: Will the hon. Gentleman join me and others who support the view of the Electoral Commission and the Office of the Deputy Prime Minister Select Committee that, in the light of the bad experience of postal voting earlier this year, and with the prospect of a general election next year, there should be some early legislation to make voting applications personal, not by household, to allow them to be seen as they are made; to allow any patterns in applications to be seen; and to clean up thoroughly the present unsatisfactory nature of applications, with fraudulent declarations of identity?

Peter Viggers: Yes, the Electoral Commission will develop proposals for a foundation model, as suggested in its report, "Delivering Democracy", and it will report before 31 March 2005. It will consult with interested individuals, including Members and political parties, as the development work gets under way next year. The model is expected to build on the benefits of all-postal voting but also to retain use of polling stations. As for legislation, as the hon. Gentleman will well know, that is a matter for the Government and the House.

Chris Bryant: Can I urge the hon. Gentleman not to get too over-excited about the issue of fraud in postal voting? Between 5,000 and 7,000 postal votes were cast in my constituency in the local elections this year, with no accusations of fraud. The one issue that most troubled many voters was that someone else had to watch over them when they were signing a form, which was enforced on us by the Liberal Democrats. Many people find it troubling that someone else must act as a witness to say that they are the person who they said that they are.

Peter Viggers: The hon. Gentleman is right. The commission has noted that the level of allegation and prosecution in the areas where all-postal voting was piloted is at this time no higher than that noted in a conventional election in those areas. The other point that he makes is entirely correct, and the Government have now moved to eliminate that type of form.

Jonathan Djanogly: Following the highly unsatisfactory all-postal vote for the north-east assembly, could the hon. Gentleman now confirm that never again will voters be forced to go to the polls without the choice of casting their vote in a ballot box?

Peter Viggers: As my hon. Friend will have heard me just say, the Electoral Commission is now working on a foundation model, and recognises that a significant proportion of the population wish to cast their vote in a ballot box.

Overseas Voter Registration

Greg Knight: What steps the Electoral Commission is taking to promote overseas voter registration.

George Young: What technology the Electoral Commission is using to aid overseas voters in registering for the next general election.

Peter Viggers: The commission provides information and application forms to eligible overseas electors through its websites. In addition, information has been provided to the Foreign and Commonwealth Office for use on the websites of overseas posts. Whenever the commission undertakes general voter registration campaigns, it includes targeted public relations activity, directed at potential eligible overseas electors.

Greg Knight: Why is the Electoral Commission spending £705,000 in the current financial year specifically to encourage young people to get out and vote, yet only £9,000, the majority of which, I understand, is staff costs, is being spent to encourage overseas voters to register and vote. As it has been estimated that up to 4 million people are living overseas who could take part in our democratic process, is not that discrepancy somewhat perverse?

Peter Viggers: My right hon. Friend is on to a very good point. The Foreign and Commonwealth Office estimate of British citizens living overseas is 15.5 million, and there is no accurate estimate of the number of those who would be eligible to vote by reason of having been registered on an electoral register in this country within the past 15 years. It is difficult for the Electoral Commission to consider such a wide range of individuals because they are difficult to identify and even more difficult to reach. It is a stark fact, however, that only 11,496 persons were registered to vote from overseas in February 2001. We all have our part to play in encouraging more registrations and voting.

George Young: On that theme, can I press my hon. Friend on online registration? If a citizen can file his tax return online and discharge that civic obligation, why can an overseas voter not complete his electoral registration form online and discharge another important civic obligation?

Peter Viggers: Indeed, the Electoral Commission has given some thought to that issue, it is in its mind, and it would be one way to facilitate the registration and voting of overseas residents.

Harry Barnes: Should not the Electoral Commission simply let overseas registration wither on the vine? People should be registered in the country responsible for the relevant laws and economic arrangements—a principle that should be fully adopted not just in this country, but overseas. We should at least change the law regarding a link with the past from 15 years to just five years; at the moment, the situation changes when people move overseas.

Peter Viggers: I would prefer not to be drawn down that path. As a spokesman for the Speaker's Committee, it is not for me to comment on such matters, but the hon. Gentleman's point will be noted.

David Heath: While encouraging those who are eligible to vote to do so, is it not important to maintain for overseas voters the same level of precaution against fraud that we are urging in respect of our domestic electorate? Is the Electoral Commission doing any work on the difficulties experienced by those who register in this country, but who are in fact nationals of other countries and are not entitled to vote in British elections?

Peter Viggers: The hon. Gentleman makes a good point, but it goes slightly wide of the question so I would prefer to leave it for the moment.

CHURCH COMMISSIONERS

The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—

Women Bishops

David Taylor: What assessment the commissioners have made of the funding implications of a General Synod vote to allow women bishops; and if he will make a statement.

Stuart Bell: None. By way of a statement, the General Synod has yet to decide whether in principle it wants to embark on the legislative process that would be necessary to enable women to be bishops.

David Taylor: It is very appropriate for the Church, in this season of Advent, to prepare for the arrival of female bishops, and it is proper and reasonable to provide for those who cannot accept the ministry of women in the episcopate. But in addition to its theological and practical flaws, would not the proposal for a new, third province parallel to Canterbury and York cause serious financial damage to the Anglican Church at every level—from the lowest and humblest parochial church council, such as that on which I serve, to the most elevated of bodies, such as the Church Commissioners, on which my hon. Friend serves?

Stuart Bell: The question of a third province would doubtless appeal to the hon. Member for Lichfield (Michael Fabricant), who is in his place. The General Synod will be asked at its February meeting to take note of the report, and in principle, the decision as to whether it wishes to remove the legal obstacles to women's ministry in the episcopate will come later in the session. The wider point that my hon. Friend makes will of course be taken fully into account.

Robert Key: But does the hon. Gentleman not agree that the Church of England should have learned its lesson about separate arrangements for those who disagree with the general opinion of Synod, and that it would be very helpful if, in the interest of the good governance of the Church, the commissioners undertook a survey of the options mentioned by the Bishop of Rochester in his recent report? That survey will hopefully show that people will not be forced to come to a particular conclusion that is based on money, rather than on the very good sense that the Synod will demonstrate when it agrees to women bishops.

Stuart Bell: I take note of the hon. Gentleman's point, which reminds me of a comment that you will be very familiar with, Mr. Speaker. I have no instructions to give other than this House directeth me, although in this case it is question of how the Church of England directeth me. On the financial implications, the Church is giving the Bishop of Rochester's report serious consideration and the archbishops have commended it for prayerful study. There is a very long synodical process through which we shall reach the question of women bishops, and I am sure that the hon. Gentleman's point, along with the other points raised, will be taken fully into account when Synod meets in February.

Terms of Employment (Clergy)

Ben Chapman: What recent assessment the commissioners have made of the work of the Department of Trade and Industry working group looking at terms of employment for members of the clergy.

Stuart Bell: No concrete proposals have emerged from the DTI working group's meetings to date.

Ben Chapman: Does my hon. Friend think that satisfactory? I recognise that the wheels turn exceedingly slowly in respect of Church matters, but can he indicate whether any progress has been made, what direction the working group is taking, and when we might expect some form of announcement?

Stuart Bell: The thrust of my hon. Friend's question is a matter for the DTI, since it is up to its working group to introduce concrete proposals. The working group's discussions concerning the service review have been reported back to the clergy, and a report on the second phase of its work will be submitted to the Archbishops Council later this month.
	"The mills of God grind slowly, yet they grind exceeding small; Though with patience He stands waiting, with exactness He grinds all."
	I would submit that, at the end of the day, we may reach the conclusion that my hon. Friend wishes.

Church Appointments

Anne McIntosh: If he will make a statement on the consultation procedures for Church appointments.

Stuart Bell: Different procedures are used for different appointments. In all cases, consultation is extensive whether it be for the appointment of diocesan bishops, other senior clerical appointments or parish appointments.

Anne McIntosh: I thank the hon. Gentleman for that reply. Will he join me and, I hope, the whole House in paying fulsome tribute to the present Archbishop of York and wish him God speed in his new parochial duties when he steps down from his current position? Will the hon. Gentleman assure the House that the consultation to which he just referred will be as wide as possible in respect of the succeeding Archbishop of York? Will he have regard to the turmoil in the Church of England, to which the archbishop referred, and ensure that both wings of the Church—the traditional and the modern—are represented?

Stuart Bell: I am grateful to the hon. Lady for mentioning the retirement of the Archbishop of York, who will take up his position as a parish priest on 15 January. I am sure that all hon. Members will wish him God speed in his new role and will welcome and appreciate the work that he has done up to now on behalf of the Church. We all read with great interest his interview, published in The Sunday Telegraph yesterday. As to the consultation process, I doubt whether there has ever been one as wide and far-reaching as the present one. It includes the hon. Lady herself, who was asked to give her views, as have others within the Church. As a result of the extensive consultation period, I am sure that, when it comes, the appointment will represent the widest interests of the Church.

ELECTORAL COMMISSION

The hon. Member for Gosport, representing the Speaker's Committee on the Electoral Commission, was asked—

Local Referendums

Hugh Bayley: What advice the Electoral Commission gives to local authorities on the conduct of local referendums.

Peter Viggers: I have to tell the hon. Gentleman that local referendums are held under the auspices of the Local Government Act 2003 and, as such, are outside the remit of the Electoral Commission.

Hugh Bayley: Does not the hon. Gentleman nevertheless have a view that it would be good practice, when the local referendum takes place, for the question and supporting documents to be agreed on an all-party basis?

Peter Viggers: It is not really my role to have views, Mr. Speaker, but I can say that the Electoral Commission can give advice where it has expertise and knowledge. It will no doubt take account of the point that the hon. Gentleman has made.

Benefits Uprating and Welfare Reform

Alan Johnson: With permission, Mr. Speaker, I would like to make a statement on benefits uprating in the context of this Government's continued fight against poverty and our aim of employment opportunity for all. I shall place full details of the uprating in the Vote Office and arrange for figures to be published in the Official Report. I can confirm that most national insurance benefits will rise by the retail prices index, which is 3.1 per cent. and most income-related benefits will be uprated by the Rossi index, which is 1 per cent. From next April, retirement pension will go up by £2.45 a week for single pensioners and £3.95 a week for couples. When we came to office, the pension was just £62.45 for a single person: from April it will be £82.05, and £131.20 for couples.
	As my right hon. Friend the Chancellor set out in last week's pre-Budget report, both next year and in the spending round to 2008, the pension credit will rise faster than inflation by average earnings, meaning that there will be 600,000 fewer pensioners in poverty than if the guarantee was uprated only in line with prices. Next year, the guarantee credit of pension credit will rise so that no single pensioner need live on less than £109.45 a week and no couple on less than £167.05 a week.
	The threshold for the savings element of pension credit will be uprated so that it remains equal to the basic state pension. That means that a typical single pensioner will now gain from pension credit if they have an income of up to £150 a week, while a typical couple will gain on an income of up to £220 a week.
	More than 3.1 million pensioners are now in receipt of pension credit, with an average award of more than £41 and with average arrears payments running at around £1,000. Each week, the Pension Service works to help pensioners access their entitlements in their local communities. It is a personalised service that has also led to increases in the take-up of attendance allowance, carers allowance, council tax benefit and housing benefit.
	Take-up of pension credit has been strongest among the very poorest pensioners. The definitive national statistics figures on take-up rates will not be available for some time, but among those whose incomes would otherwise be below the guarantee element—currently £105—our best estimate is that take-up rates are running at more than 80 per cent. Among those with incomes at or below the basic state pension who do not gain from the savings element, we are now outstripping our expectations at the time of the spending review, in case load terms, by 25,000 households, or by at least £40 million this year in expenditure terms.
	Following all the measures introduced since 1997, the average pensioner household will be £1,350 per year better off in 2005–06 as a result of our tax and benefit policies than they would have been under the 1997 system, while the poorest third will be £1,900 per year better off. In total, there will be an extra £10 billion spent on pensioners in 2005–06. That is £7 billion more than an earnings link would have given them, with almost half of the £10 billion extra spending going to the poorest third of pensioners.
	As well as targeting our help at the poorest, we have done more for all pensioners than an earnings link would allow. Take for example, a single pensioner aged 76, living alone and with an income too high to be eligible for pension credit. A straight earnings-related uprating would give her £9.90 extra a week. Instead, this year, as a result of our reforms, she has a basic state pension increased in real terms by 7 per cent., a £200 fuel allowance and a free TV licence worth £121 a year. That adds up to an extra £11.62—or £1.72 a week more than the earnings link would have provided.
	With 1.8 million pensioners lifted out of absolute poverty since 1997, we have made remarkable strides in tacking the pernicious pensioner poverty that we inherited in 1997, and we will continue to make its eradication our priority. We reject proposals that would see the poorest pensioners fall back into poverty and that would be an unsustainable burden on the public finances.
	Around three quarters of individuals below the poverty line live in households with a pensioner or a child, so as well as tackling pensioner poverty, we are right to focus on child poverty. We have lifted more than half a million children out of relative low income since 1997. The child tax credit will increase by earnings, and the maximum eligible child care costs covered by the working tax credit have increased by 50 per cent. to £300 for two or more children.
	The standard rate of maternity allowance and statutory maternity pay will be increased by the retail prices index to £106 a week. Last week my right hon. Friend the Chancellor announced the extension of paid maternity leave. Instead of the 16 weeks in 1997, it will rise from six months today to nine months in April 2007, with a goal of an entire year of paid maternity leave. Whereas the maximum maternity pay and child benefit for mothers at home with their first baby in 1997 was just £2,610 for the first year, it will rise by 2007 to £8,300—a real-terms increase of £5,000.
	In addition, the pre-Budget report also announced our new measures for child care, including an extra 1 million child care places being made available by 2010 and an increase in the number of Sure Start centres from 600 to 3,500 over the same period. That will not only improve the education opportunities of children but help parents to get into work.
	A job is the best route out of poverty, and continued investment in the new deal and Jobcentre Plus will help us to move even further towards full employment and away from the mass unemployment of the 80s and 90s. We have the highest employment rate of the major industrialised nations, with unemployment at its lowest level for 30 years. There are 2 million more jobs than in 1997, with 1 million people helped into work through our new deal programmes. We have seen an increased employment rate for lone parents, disabled people, ethnic minorities, the low skilled and people aged 50 and over. For the fifth successive year, I can announce that we are freezing non-dependent deductions to relieve the pressure on low-income parents who are housing their adult children.
	We are determined to ensure that everyone has the opportunity and the incentives to work. Our pathways to work pilots have achieved outstanding early results, with twice as many sick and disabled people getting back to work in pilot areas compared with non-pilot areas. The pre-Budget report announced our intention to build on that success by extending the scheme to a third of the country, covering the areas with the greatest concentration of incapacity benefit claimants, starting from October 2005.
	With nine out of 10 people expecting to work again when they first claim incapacity benefits, pathways is helping them to meet their aspirations, fostering a culture change where sickness and disability need no longer mean a withdrawal from work. We are committed to extending that culture change by working with GPs and other health care professionals to embed a more positive attitude towards the beneficial effects of work. We will make a range of support available to GPs, including improved training materials for new and existing doctors to help them to support patients in getting back to work effectively.
	We are piloting a scheme, based on innovative projects such as those undertaken in Glasgow, Bristol and Camden, to place employment advisers in GP surgeries. We are allocating £30 million more to expand the number who can benefit from the new deal for disabled people. We want to try to reduce bureaucracy for GPs, but also to build up our understanding of the most effective ways that GPs are helping their patients to manage a return to work.
	A key part of that culture change is eliminating discrimination. We are proud to have introduced our Disability Discrimination Bill, which is today being debated on Second Reading in the other place. Combined with our extension of the Disability Discrimination Act 1995 in October, we are radically transforming the rights and opportunities of disabled people. We are also committed to breaking down the barriers that older workers face by taking steps to tackle age discrimination and improve the financial inducements for people who decline to take their basic state pension at the age of 65.
	The Pensions Act 2004 improves the rewards for deferring the state pension and gives people the new choice of taking an enhanced pension or a lump sum of, on average, £20,000 to £30,000 for people who choose to delay taking their state pension for five years. Furthermore, the rewards are significant even for choosing to defer for a period of substantially less than five years. For example, a 65-year-old single man entitled to a state pension of £105 a week who defers for two years would be entitled to an increased pension of more than £126 a week, or a lump sum of £11,600.
	With today's uprating, we continue our commitment to and progress towards a fair and inclusive society of opportunity and independence for all, tackling poverty and breaking down the barriers that prevent people from realising their own aspirations in the workplace. I commend this statement to the House.

David Willetts: We broadly welcome the statement. We also welcome the Secretary of State to the House. I was half expecting someone else, when I read a story in The Sun today about Labour's
	"New pensions supremo, Alan Simpson",
	topped with a nice photo of the hon. Member for Nottingham, South (Alan Simpson)—so it is good to see the Secretary of State here.
	I hope that the right hon. Gentleman will explain further the background to his plans for pension credit, because there is an interesting difference between what was stated in the official release of the Chancellor's autumn statement and what the Secretary of State has said today. According to the official release, the Chancellor was going to say last week:
	"I can confirm that next year the pension credit will rise faster than inflation—by average earnings"
	which of course left scope for a change of strategy after that—we know that the Secretary of State regards the pension credit as a short to medium-term policy only. However, what the Chancellor told the House, as recorded in Hansard, is:
	"I can confirm that, next year and in the spending round, the pension credit will rise faster than inflation—by average earnings"—[Official Report, 2 December 2004; Vol. 428, c. 787.]
	and it is that formulation that the Secretary of State has repeated today. Does he realise that if he keeps increasing the pension credit by earnings and the basic state pension by prices, the gap between the value of means-tested benefits and the basic state pension will widen? How could that possibly be consistent with what he told us he wanted when he said that we had to
	"bite the bullet and look at the state pension system . . . so that if you do a lifetime's work, it will deliver a pension above the basic level of means-tested support."?
	His uprating statement today is inconsistent with the strategic aim that he set out in that speech last month. We need to know what he is trying to do, and whether he believes in means-testing increasing indefinitely.
	It is all right the Secretary of State being a free spirit, speculating about how he can reform the pensions system when he is giving speeches outside this Chamber or in interviews with The Daily Telegraph, but what happens when he turns up here and gives a totally conventional uprating statement that will lead to more means-testing and more pensioners on means-tested benefits? He must make his strategy clear. Following another of his recent media appearances, I read in the Telegraph on Saturday, I think it was, that he spent his youth playing in a pop group called "The In-Betweens"—perfect positioning in today's Labour party, in between the Prime Minister and the Chancellor, and in between means-tested benefits and pension reform. We want to know his strategy for pensions.
	Will the Secretary of State confirm that pensioners who got an extra £100 in their benefits this year will not get that next year but will get a £50 special payment instead, so that, after allowing for inflation, there will be a fall in the real value of benefits for pensioners next year compared with this year? Will he also confirm that that is before further increases in council tax? Studying the small print of the Chancellor's autumn statement reveals that average council tax will increase by 8 per cent. next year; what does that mean for real pensioner incomes?
	The Secretary of State's statement was billed as being about not only benefits uprating but welfare reform, so let me ask him about what welfare reform means to him. It is obviously important that we reform welfare, and if ever the Government get around to trying to do so seriously, the Conservatives will back them. However, I admit to a certain world-weariness when I see another enthusiastic, fresh-faced Secretary of State, new to his office, come into the Chamber to announce that he will engage in welfare reform. We have been here before, and reform has never been delivered before. Why should it be any different this time?
	Nowhere is the gap more obvious than in incapacity benefit, which the right hon. Gentleman mentioned today. May I quote what the Prime Minister said more than five years ago about reforming welfare and incapacity benefit? He said:
	"we are reforming the welfare state, and in particular, we are reforming incapacity benefit . . . There are now more people claiming incapacity benefit than claiming unemployment benefit. That situation cannot possibly be sustained."—[Official Report, 10 November 1999; Vol. 337, c. 1123.]
	That was in November 1999, but since then the number of people on incapacity benefit has gone up from 2.267 million to 2.405 million. Having previously been promised welfare reform that was not delivered, why should we believe the Secretary of State this time, especially when the number of young people who are not working, studying or training has gone up since Labour came to office in 1997 and since the introduction of the new deal? It now stands at 1.112 million, which is the highest figure since 1997. Does that not tell the Secretary of State that there is something wrong with his protestations about welfare reform?
	The Secretary of State referred to families, but will he comment on something that he carefully removed from his uprating statement? He talked about child tax credit and the uprating of the value of the child element of the tax credit. He did not say anything about the freezing for the second year of the value of the family element of the child tax credit. That is significant, because the child element of the child tax credit is heavily means-tested, and that is the part into which the Government are putting more money. The family element of the child tax credit goes to most families, and Labour is freezing it. The underlying policy for families, just as it is for pensioners, is more means-testing. The direction of policy on families is more means-testing, just as it is for pensioners. I am pleased that the Secretary of State has asked his officials for a note because, sadly, there are not many families in this country who can find their way around the Gordon Brown system. The statement involves more means-testing for pensioners and families, but that is not the direction in which we believe the country should go, and it certainly cannot be called welfare reform.

Alan Johnson: I reassure the hon. Gentleman that the Secretary of State for Work and Pensions still resides in Hull rather than Nottingham. I was surprised to see the photograph myself—Alan Simpson must be even more surprised.
	I thought that there was terrific news in the statement about pension credit, which is something in which hon. Members on both sides of the House should be interested. Her Majesty's official Opposition do not want to do away with pension credit, and neither do the Liberal Democrats, so we all have a shared concern in making sure that we achieve maximum take-up. In my statement, I pointed out that we are succeeding in reaching the poorest pensioners who are on incomes even lower than the basic state pension because they did not make enough national insurance contributions. That is relevant to the point about uprating, as it is tremendous news for those pensioners that we will continue to index the guaranteed element of pension credit by earnings.
	It is no good embarking on the task of taking millions of pensioners out of poverty—we are providing them with the reassurance of a safety net, including an additional savings element—and lifting 1.8 million pensioners out of abject poverty only to start to go backwards. The result, as I said in my statement, of linking the pension credit to prices rather than earnings would be 600,000 pensioners falling back into poverty. Indeed, the hon. Gentleman's policy of linking the pension credit to price rather than earnings would mean that, at the start of the 21st century, pensioners who are striving to get closer to average earnings—our ambition is to eradicate pensioner poverty—are, in fact, taken backwards. The statement is therefore good news for individuals on pension credit, and people would be extremely concerned about any political party that seeks to unravel what we have put in place.
	The hon. Gentleman said that the proposals were inconsistent with the basic state pension, but there is no inconsistency at all. On the back of the Turner commission, we are looking at a new world for pensioners, in which there is a doubling of the number of people over 65 as a proportion of the population. The birth rate is declining, longevity is increasing and all countries must face the issue of what we are going to do in the long term. That should be a more mature debate than the debate about today's pensions. Of course today's pensions are important, but they must be sustainable into the future. We make no apology for looking at the long term. Part of the accusation was that we had a short-term approach, but there was no more short-term approach than that displayed by the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), the Leader of the Opposition, who said that pensioners were more concerned with today than with what happens in 2050. Society and politicians must be worried about the situation now and in the future.
	The hon. Gentleman said that there had been various speeches on welfare reform but that nothing had happened. One does not need to look at figures or statistics. One need only walk into a Jobcentre Plus office to see the transformation in welfare reform. It is not just the practical effect of merging the Employment Service with the Benefits Agency. It is the whole approach to people who need help to get back into work—the eradication of the screens and the dreadful atmosphere in those places, which made the customer feel more like a guilty party than like someone seeking assistance. Our reforms through Jobcentre Plus have been remarkable. The hon. Gentleman's policy of privatising Jobcentre Plus and abolishing large chunks of the new deal should concern us all, were there any danger of the Conservative party being elected.
	The other aspect of welfare reform that the hon. Gentleman mentioned was IB. It takes a certain amount of panache and style—I give him credit for having both—to stand at the Dispatch Box as a Conservative MP and a member of the Government in the previous Administration, and speak about incapacity benefit. Let me remind the House that that trebled from 700,000 to 2.6 million between 1979 and 1997. Had we carried on that trend, there would now be 4 million people on incapacity benefit. The figure has risen from 2.6 million to 2.7 million because the inflow into incapacity benefit is down by a third.
	We must improve the situation even further. Pathways to work is an incredibly important element of that, and I am pleased that the Chancellor last week announced its extension to a third of the country. Given that we have the most stringent gateway into incapacity benefit in the world, as measured by the Organisation for Economic Co-operation and Development, we must examine why people are coming on to that benefit. One factor—the hon. Gentleman asked for some of our thoughts on the subject—is that a third of people are flowing on to incapacity benefit direct from the workplace. They were originally on statutory sick pay. When that runs out, they lose their link with the workplace, stay on the same rate but are suddenly into incapacity benefit. Then we spend an awful lot of time seeing how we can turn those people around and get them back into a job.
	There are some important lessons to be learned there, but the most important lesson from pathways to work is that so many people on IB want to be back in work. They do not want to be treated as they were by the previous Government—condemned to a life on benefits. They want a helping hand to get them into work. That is what pathways to work is all about.
	The hon. Gentleman mentioned the NEET figure—those not in education, employment or training. The increase is entirely explained by the increase in population. Nevertheless, it is too high and we need to tackle the problem. That is why there were a range of measures in the pre-Budget report last week, including the concentration on skills and the change to the benefit arrangements so that those who are in full-time training unwaged can pick up some financial assistance, in the same way as others get the education maintenance allowance. There are important issues that need to be dealt with.
	Finally, the hon. Gentleman asked a question about which I make no excuse for having sent for a note. My understanding, before receiving the note, was that the issue was part of the changeover to working tax credit. The family element stays at £545, so families will receive exactly the same, in nominal terms. Since we came to power in 1997, families with two children and an income of £50,000 have received a large boost, raising financial support for their children from £20 a week to £38.90 a week next year—a real-terms increase of 59 per cent.

Tom Levitt: There is no better way of improving the income of people at the bottom of the income ladder than helping them off benefit and into work. Will my right hon. Friend look at the pathways to work project figures for the Glossop Jobcentre Plus office in my constituency? At the beginning of the project, the office was set a target of ensuring that 12 people on incapacity benefit moved into employment over six months. It achieved that result in 40 cases, which is a real success, and I hope that my right hon. Friend will pay tribute to it. My only criticism of what he has announced today is that the roll-out of pathways to work is not fast or great enough.

Alan Johnson: My hon. Friend makes an important point about the work that our people on the ground, including those in Glossop, do to achieve such remarkable results. I am not surprised by what has been achieved. When I visited Gateshead I met the staff involved, who have years of experience of dealing with people and trying to get them into work, and they said that the results exceeded all their expectations. As for my hon. Friend's disappointment, the scheme is still in its early days. It is barely six months old, and in the expansion not only in the other areas being covered but in existing pathways to work areas, where we will now move on to those who have been on IB for three years or longer, we will have to take things carefully, so that we are absolutely sure that we are learning all the lessons to keep this remarkable momentum going.

Steve Webb: The Liberal Democrats welcome a number of aspects of the statement, including the planned improvement in maternity provision. If I might briefly don my anorak, may I congratulate the Secretary of State on freezing non-dependent deductions for the fifth year running? When young people are increasingly being forced out of family homes, anything that reduces the pressure on low-income families and makes it easier for those young people to stay is a good thing. That is an obscure corner of the system, but I welcome the direction of Government policy.
	I also welcome the courageous, visionary and pioneering way in which the Secretary of State is agreeing with the Liberal Democrats on the subject of the citizen's pension. I welcomed his weekend comments in the press about his approach to that issue. Will he give us a flavour of the response that he has received from ministerial colleagues in other Departments when he has broached with them the ideas that he is thinking about in this reform to pensions?
	On the specific group of childless adults, will the Secretary of State tell us his thinking as reflected in today's statement? He will be familiar with the New Policy Institute's recent report highlighting poverty among childless adults, who have inevitably been a lower priority than children and the elderly, but are not irrelevant. Let me give two examples that arise from the statement. A woman of 59 on income support gets £56.20 a week—an increase of just 55p was announced today—but the next year her income will go up to £109, and almost double. In one sense, it is good that women can receive a generous amount at 60, but the disparity is growing every year. Can it go on like that? Can there be any logic in doubling somebody's income when she moves from 59 to 60, although her needs may be no different from one year to the next?
	The other example is the case of a young woman under 25 with a partner who becomes pregnant. If the partner is not interested and disappears from the scene, she will be living on £44.50 a week—the increase will be just 45p. An expectant mother will be living on less than £45 a week. What does the Secretary of State think that it will mean for the well-being of the child if the woman receives only the single under-25 adult rate? Is it not about time that he considered discrimination in the system against under-25s? Can it really be justified any longer?

Alan Johnson: I thank the hon. Gentleman for his support. He said that he was an anorak, but Labour Members think that he is well on the way to becoming a cagoul. I welcome his welcome of the freezing of non-dependent deductions and the increase in maternity provision.
	I do not think that I will get involved in talking about internal discussions with other Ministers—

David Willetts: Why not?

Alan Johnson: Okay, then. They all support the drive to take pensioners out of poverty and to have a sustainable and equitable pensions system into the future. For every Labour Member, the argument about the citizen's pension is not about whether we are for or against doing something for women pensioners or recognising that they have particular difficulties. The hon. Member for Northavon (Mr. Webb) knows the arguments about the contributory principle and the other elements that are there to help. There is, however, absolute unanimity that we must tackle the problem of women's pensions. The citizen's pension, for which the Liberal Democrats are now claiming credit, has been advanced by many Labour Members for many years. The importance of the issue among Labour Members reflects the fact that more women, although not enough, have entered the House of Commons, and that shift is reflected in many areas of policy that have changed dramatically since 1997.
	The hon. Member for Northavon raised the Joseph Rowntree Foundation report, which states:
	"There has been substantial success over the last decade in reducing child and pensioner poverty and unemployment."
	The Rowntree report raises some points about childless single adults, and we must examine that area, but I hope that everyone understands that when we formed the Government, our priority was to tackle the fact that one in three children and 2.8 million pensioners were in poverty. The employment market is benign, and reducing unemployment has had a beneficial effect on all strata of society. We have been working to our priorities, but the Rowntree report rightly points out other areas that we should examine, now that we are seven years into government.

Frank Field: Although the Secretary of State was right to draw attention to the good news that the Government have unfolded in their programme, does he accept that voters quickly acclimatise to Government success, and then look to what the Government might do next? Given that the Tory party and the Liberal Democrats have outlined their plans for long-term reform, does he think that it will be easier for us to fight an election if our election manifesto includes a hint about our long-term pension reforms? [Hon. Members: "Wait for Turner."]

Alan Johnson: We do not have to wait for Turner. My right hon. Friend is right to say that long-term pension reform will be an issue at the next election. We can point to the Pensions Act 2004, which is a crucial element in tackling that problem. It involves major reform on informed choice and security, in the form of the pension protection fund. Many of its other elements are linked with the Finance Act 2004, which merges eight different tax systems into one. Those measures are all progressive, and they will be crucial in this debate.
	Many people would do well to wait for the Turner report, because Turner's analysis of the problem is exceptional. He says that even if the Government pushed him to produce his report more quickly he would not do so, because he believes that a comprehensive report that tackles the issues is much more important than a speedily produced report. [Interruption.] Perhaps that is Alan Simpson, asking what I am doing imitating him at the Dispatch Box.
	In the foreword to his first report, Turner said that, looking ahead to 2030 or 2050, the issue is so important that knee-jerk reactions are not right, and that we—none more so than the Conservative party—were all living in a fool's paradise in the '80s and '90s. He also made the point that the problem requires a measured mature response from politicians. We should say something in the manifesto. Between now and the manifesto, however, we should not say that we have all the answers without waiting for the second report from Turner, and without having a debate, which the Turner report will instigate throughout the country.

Paul Holmes: I welcome much of what the Secretary of State has said. I welcome the Disability Discrimination Bill, which is better late than never. Given that it has been introduced so late in this Parliament, I hope that it will reach the statute book. I also welcome the extra £30 million for the new deal for disabled people, which has been so successful that some of the organisations involved, such as the Shaw Trust, have been told to stop placing disabled people in work.
	I also welcome the extension of pathways to work. Liberal Democrat Members have long said that it is a travesty that the disabled, who face the most obstacles to getting back into work, get only 3 per cent. of the £750 million budget for the new deal. In extending pathways to work to a third of the country, is the Secretary of State rethinking the policy of using the constant threat of benefit sanctions to try to force people into work? Personal advisers at one of the early pilots in Chesterfield in north Derbyshire told me—I have raised this before, in Committee—that they have to do a lot of work to undo the damage done when a disabled person claiming incapacity benefit receives a threatening letter saying, "You must turn up for a work-focused interview, on pain of losing your benefit, or part of it." The adviser has to try to ring the person before the letter arrives, to reassure them that the intention is to help them into work, not to threaten them or to take their benefits away.

Alan Johnson: The hon. Gentleman suggests that the Disability Discrimination Bill is better late than never, but we promised it in our last manifesto and said that it would be introduced in this Parliament—as, with a fair wind, it will be. That is why we gave it a First Reading the day after the Queen's Speech, and why it will have its Second Reading shortly.
	The hon. Gentleman also mentioned that another £30 million is going into assisting some of the problems identified by the Shaw Trust, and by other charities.
	I disagree with the hon. Gentleman about sanctions. The pathways to work project has the backing of the disability lobby on the basis of rights and responsibilities. There is a responsibility to attend a work-focused interview. The £11 sanction for not turning up is fair and reasonable, given that the programme involves condition management and assistance such as a £40-a-week in-work credit to help disabled people once they get into work. I understand that insistence that they attend, to the extent of using the £11 sanction, is very rare. When I went to Gateshead I asked the people there how many times they had had to implement it, and they find not only that they do not have to do so, but that people who are not even part of the project, because they have been on IB for longer than a year, beat a path to their door to ask for help. The rights and responsibilities approach must continue. If there are any specific problems I should like to consider them, but that is the right approach, and we have wide support for it.

Tom Harris: The Government's ambition to abolish child poverty is the most important that we have, and I welcome my right hon. Friend's comments on child tax credit. However, will he address the concerns of a constituent of mine to whom I spoke at the weekend, who had her initial award for child tax credit reduced by 80 per cent. in subsequent years because officials overestimated what she was due? She is not alone in that. What can my right hon. Friend and his Department do to ensure that such overestimates, and the misery and distress that they inevitably cause, are minimised?

Alan Johnson: I understand that my hon. Friend has an interest in these matters, his partner having given birth to a child quite recently. Every MP has examples of such problems, and we are working closely with the Treasury to try to solve them. To see what we have done to tackle child poverty, one need only look at the level of income support and child allowance that existed in 1997. Then, for a child of 0 to 11 years it was £16.90; next year, it will be £43.88—an increase of 127 per cent. We have to work to eradicate the genuine problems that my hon. Friend has identified, but that must not detract from the success of our attempts to eradicate child poverty.

Andrew Selous: In the context of welfare reform, the Secretary of State will be aware that the working tax credit leaves many couples, and therefore any children that they have, up to £36 per week worse off than if they were on their own. That is in marked contrast to other social security systems, such as that in Australia. Will the Secretary of State investigate that anomaly to ensure that tax credit or benefit recipients are not worse off by living together than by being on their own? It must surely be wrong to penalise people for coming together as couples if they choose to do so.

Alan Johnson: I am not absolutely sure whether the hon. Gentleman is right—but he spoke with such panache and was so positive that I shall assume that he is, and the issue needs to be examined. However, the working tax credit and child tax credit have meant an enormous increase in reducing poverty. There are anomalies in the system, and they need to be tackled.

Peter Pike: My right hon. Friend knows that I support 100 per cent. the Government's pension credit policy, which helps the poorest pensioners. I also acknowledge that the pension centres have helped many pensioners in all our constituencies to get other benefits to which they are entitled. My right hon. Friend said that take-up was 80 per cent. That means that 20 per cent. do not get the credit to which they are entitled and which, in many cases, they desperately need. How do we reach that 20 per cent. and ensure that 100 per cent. of the pensioners who most need the help get it?

Alan Johnson: The first thing that we can do is knock on the door of every pensioner who we believe should claim the credit, but does not. That was suggested to us, and we will do it. On the point about the 80 per cent., we expected to have a rate of 70 per cent. take-up at this stage. The other point was that we are missing the poorest pensioners, and we must consider that carefully. Every indication that I have received suggests that part of the problem arises because some people are not sure whether the savings credit element, which can sometimes be £5 or £6, is sufficient. There is some confusion about that. There is also a belief among some people that if they claim pension credit they will lose housing benefit or some other payment. We must deal with that. We are also considering whether small payments could be paid as a one-off annual payment rather than a weekly payment, thus making the credit more attractive to claim. We are considering all those aspects, and we want to get 100 per cent. take-up if possible.

Hugh Bayley: I welcome the success of the pathways to work pilots in helping people on incapacity benefit to get back into work. As my right hon. Friend rolls out and broadens the programme throughout the country, will he further consider the way in which medical rehabilitation services for people of working age could help to get them back to work? That could be an important part of the process.

Alan Johnson: My hon. Friend is right. That is why the Health and Safety Executive has a project under way. Rehabilitation has been underplayed by employers, who could use it to continue a link with people on long-term sickness, and do more to maintain that link and give them help. However, in pathways to work we also find that it is important for people to have not only the expertise of a personal adviser who is looking to place them in work, but condition management from the national health service, as well as GPs' awareness that getting them back into work could help their health. The suicide rate among those who are long-term unemployed is 35 times higher than that of people in work. For people with mental conditions, for example, being in work will be better than being out of work. When we all realise that and work together, that will be a success for pathways to work.

Orders of the Day
	 — 
	Railways Bill

[Relevant documents: The Seventh Report from the Transport Committee, Session 2003–04, The Future of the Railway, HC 145-I; and Fourth Special Report from the Transport Committee, Session 2003–04, Government, Health and Safety Commission and Executive, and Office of the Rail Regulator Responses to the Seventh Report from the Committee, HC 1200.]
	Order for Second Reading read.

Mr. Speaker: I inform the House that I have selected the amendment in the name of the Leader of the Opposition.

Alistair Darling: I beg to move, That the Bill be now read a Second time.
	The White Paper, "The Future of Rail", which I published in July this year, set out new proposals for reorganising the structure of Britain's railways. The Bill takes forward the legislative elements to implement that White Paper to simplify and restructure the railways and put right many of the problems caused by a botched privatisation 10 years ago.
	The main provisions of the Bill are to wind up the Strategic Rail Authority; to transfer the railway safety functions to the Office of Rail Regulation; to change the way in which access charge reviews are calculated; to give the devolved Administrations more responsibility; to allow passenger transport executives and London to take greater responsibilities for services in their areas; to establish a rail passenger council as a single national body and end the formal federal structure of the passengers' committees; and to put in place a better way of changing rail services to allow more flexibility and to provide for rail, light rail and bus schemes. I shall return to all those points in greater detail shortly. Before I do, I should point out that other important changes need to be made, which were set out in the White Paper but do not require legislation, and I shall return to those later as well.
	Before I turn to the provisions of the Bill, I want to put the proposed legislative changes in context. The railways are a vital public service and an essential part of the country's transport infrastructure. Whereas the railway industry was seen as an industry in decline in the early 1990s, today it is growing. Last year, more than 1 billion journeys were made—the first time that that milestone has been reached since 1961.

Patrick McLoughlin: Does the Secretary of State put this renewed confidence in the railway industry down to the way in which the private companies have increased their customer numbers?

Alistair Darling: Actually, I would say that, despite the difficulties encountered by the railways over the past 10 years, it is to the credit of everyone involved that they are now carrying more people than at any time in the past 40 years. I am sure that the hon. Gentleman would agree that the railways have been through a very difficult time in the past 10 years, involving a traumatic privatisation—Railtrack was an absolute disaster in terms of its lack of stewardship of the railways and of its failure to get to grips with costs and allowing them to get out of control—and the dysfunctional organisation of the railways, some of which problems we are putting right in the Bill. I made it clear when I announced the review of the railways in January last year that the partnership between the private and public sectors is an important one in relation to the railways, but I am very sure that, without substantial public commitment—not just in organisational terms—and public investment, we could not bring in the corresponding private money, let alone anything else that is needed. I think that we part company with the Tories over this issue. Their idea is that all that they need to do is withdraw public funding—presumably the railways would have their share of the £1.8 billion of transport cuts that they are planning—but that would almost certainly result in a reduced amount of private money coming in. I am glad that the hon. Gentleman gave me the chance to make that point.

David Wilshire: rose—

Alistair Darling: If the hon. Gentleman wishes to be as helpful, I shall certainly give way to him.

David Wilshire: I should be delighted to help my hon.Friend the Member for West Derbyshire (Mr. McLoughlin) on this matter. If the Secretary of State chooses to describe privatisation as a disaster, how would he describe the creation of the Strategic Rail Authority? If that was anything other than a disaster, why is he abolishing it?

Alistair Darling: What I said was that the way in which the railways were privatised by the previous Conservative Government was a disaster. It was bad for the railways and hugely disruptive, and the decision to set up the SRA was—

David Wilshire: A disaster.

Alistair Darling: No, it was an attempt to bring some order to a very disorderly railway system. Under its chairman, Richard Bowker, the SRA made a very good job of sorting out some of the problems that had resulted from the privatisation. I shall come back to the SRA shortly. The hon. Gentleman ought to be aware that the Conservative amendment implicitly calls for the retention of the SRA. He had better have a look at what he is being invited to vote for before he calls it a disaster.

Jeremy Corbyn: I welcome the development of a publicly owned railway system in this country and the measures that my right hon. Friend is taking to ensure that the railway is publicly accountable and publicly run. Is he prepared to go a little further and say whether the train operating companies and franchises should also be publicly owned and run, where appropriate, on the ground that that can be done very efficiently?

Alistair Darling: I shall come to the question of franchising later. If I do not say anything about my hon. Friend's point, perhaps he will remind me of his question; I shall certainly come back to it. That is one way of guaranteeing an audience for at least another 15 minutes, because he will have to stay put until then. I would say to the hon. Member for Spelthorne that he should not worry; this would not be the first time that hon. Members had been taken aback by the fact that their amendment did not say quite what they thought it did. He should have a good look at the one tabled by the Conservatives.
	There has been significant success on the railways, which is a tribute to all who work on them. Moreover, our investment nearly doubles railway investment over five years. Total investment in the four years to 2006 will be almost three times the amount at the time of privatisation. It is important to make that investment to back up the Bill.
	Just 10 days ago, when we were discussing the Bill in the context of the Queen's Speech, the hon. Member for South Suffolk (Mr. Yeo)—the Conservative spokesman—made the surprising allegation that we had cut spending on transport. I did not intervene at the time, because I was puzzled by his assertion. Let me put the record straight now.
	The hon. Gentleman compared the Department's spending according to the 2002 spending review—£11.2 billion—with that in the 2004 review, which he saw as £10.4 billion. The reason for the apparent reduction is that about £450 million of planned DFT spending is going into transport, £138 million of which is going into the ScotRail franchise and therefore goes through the Scottish Executive's books. About £300 million funds the Health and Safety Executive and goes through the books of the Department for Work and Pensions, while about £50 million goes directly to local authorities for concessionary fares. I do not want to labour the point, as I appreciate that it is some years since the hon. Gentleman was a Minister and the intricacies of public accounts are sometimes baffling, but I assure him that we have not cut transport spending. Only he and the Conservative party propose to do that.

Tim Yeo: Is it not the case that, even if we include all the figures that have been buried in other Departments' accounts but are—we are now told—available for transport spending, the figure for the current year will be substantially below that projected for the current year in 2002?

Alistair Darling: Those figures are not buried. They are properly accounted for, as is necessary unless we are to hear a row from the Public Accounts Committee. In fact, we are spending about £200 million more than we had planned. The hon. Gentleman should note that, because we are not going to let go of the fact that, between now and the next election, he will have to explain how he will get £1.8 billion out of transport. I shall say more about that later, because it is relevant to the amendment. I did not realise that he had rubbished the David James report on efficiency savings quite so much, but I shall leave him to ponder on that for a few moments.

John Pugh: I do not know whether it was a Freudian slip, but the Secretary of State said that he hoped to get parts of the dysfunctional structure right. Are there other parts that he is not trying to get right?

Alistair Darling: Even for a Liberal Democrat, that is a pretty poor point. We had already fixed the other parts; now we are finishing the process. The Bill deals with only some of them.
	The White Paper sets out six key changes that are necessary for us to build the right structure and which underpin the Bill. First, the Government will take charge of the strategic direction of the railways, because only a Government can do that. Over the years, at various times various governments have sought to distance themselves from the consequences of their spending decisions. I firmly believe that only the democratically elected Government of the day can decide how much to spend on the railways and roughly what their shape and size should be. That responsibility rests fairly and squarely with the Government.
	When we looked at the organisation of the railways last year, we concluded that one of the first principles should relate to who is best placed to do what. When it comes to strategic direction, only the Government can decide.

Brian White: The Railways Act 1993 placed a duty on the Secretary of State to promote use of the railways, which was transferred to the Strategic Rail Authority in 2000. Will that duty be transferred back to the Secretary of State?

Alistair Darling: Is my hon. Friend talking about the duty to promote freight?

Brian White: I was referring to passengers and freight.

Alistair Darling: Of course, promoting the railways is one of the Government's duties. The 1993 Act explicitly gave the SRA a role, but that is not explicit in this Bill. However, it follows from everything that I have said that, where the Government have a responsibility to decide the size and shape of the network, it is for the Government to be accountable for that. It would be difficult to impose on a Minister a duty to promote the railways. We are different from the SRA in the sense that we are elected. It would be open to another Secretary of State from another party such as the Conservative party to say, "I was elected to do something completely different." One has to live with the electoral consequences of that but, as far as we are concerned, the strategic direction of the railways and the responsibility on funding lie fairly and squarely with the Government and therefore with the Secretary of State. That is the first key point of the White Paper. It is important that people recognise that only the Government can do that, but the Government are in a slightly different position from an organisation that they may set up that has more specific responsibilities. The Government have a more general responsibility. Let us not shrink from that. It is up to the voters which Government they elect. They may want to elect a Government who slash and burn the railways, but I do not think that they want the Conservatives just yet.

Geoffrey Clifton-Brown: The Secretary of State has said twice that it is only the Government who can choose a strategic direction for our railway system. Why therefore does the Bill give such big powers to the Mayor and Transport for London? The White Paper says:
	"We will also consider whether . . . there should be any scope for Transport for London to take revenue risk from train companies".
	Can the Secretary of State confirm that the Bill will not involve council tax payers in London taking risky ventures on railways in London or inflation-busting fare increases on top of the one that we have just had?

Alistair Darling: The Bill does not do that and I will come to London shortly.
	The second key point of the White Paper was to give Network Rail clear responsibility for operating the network and for its performance, timetabling, route utilisation and so on. Thirdly, train and track companies must work more closely together, and they are doing that now. Fourthly, as I said, there will be an increased role for the Scottish Executive, the Welsh Assembly Government and the London Mayor, and more local decision making in London.

Pete Wishart: Will the Secretary of State give way?

Alistair Darling: I will in a moment.
	Fifthly, the Office of Rail Regulation will cover both safety performance as well as economic regulation. Finally, there is a better deal for freight, which will enable the industry and its customers to invest for the long term, which is an important point.
	I want to talk about the proposals in the Bill that will help us to put in place some of those key changes. I will come on to the Scottish point, if that is what the hon. Member for North Tayside (Pete Wishart) wishes to raise, in a moment. First, clause 1 provides for the winding-up of the Strategic Rail Authority and will enable the Secretary of State, accountable to Parliament, to take charge of setting the railway strategy. That means that the SRA's strategic responsibilities and financial obligations will pass to the Secretary of State, although, in some cases, strategic responsibilities will also pass to the devolved Administrations. It also means that the Secretary of State and the devolved Administrations will take over some of the SRA's role, particularly that of awarding train company franchises. In order to put those changes into effect, it will be necessary for some staff to transfer from the SRA to the Department for Transport, or in some cases to Network Rail or the Office of Rail Regulation.
	Again, I want to make an important point that has a bearing on the amendment that has been tabled by the Conservative party. This may be news to Conservative Members, but it wants, apparently, to keep the SRA because, it says, it does not want civil servants and/or politicians to take part in the award of contracts. Let us make one thing clear. Ministers will not be involved in evaluation and discussions in relation to the award of contracts. Of course they have to sign them off, as we did anyway with the SRA. When the SRA went through the contract process, of course it had to come back to the Secretary of State to sign off because there are huge financial implications.
	As for the idea that people employed by the Department for Transport cannot do that work, they do it in the Highways Agency, which has long been recognised as an extremely good organisation in procurement. It is done on behalf of the Government, but the contract-awarding process is completely separated from Ministers, as it should be, so that will not happen. The idea that Ministers will be involved in negotiations or have any improper influence on awarding contracts is absolute rubbish, as the Opposition should know. The rail group within the Department is being reorganised to reflect that.

Gwyneth Dunwoody: Will my right hon. Friend make it clear that there is no question of any franchise being awarded on the basis of the known personalities or political connections of particular persons? The suggestion is going round the industry that a particular company will not get a franchise simply because of its direct connections with the Conservative party. That is ignorant nonsense and I want it denied here and now.

Alistair Darling: My hon. Friend is right to raise this point. I have not heard the suggestion to which she refers, but it is absolute nonsense and she can have the categorical assurance that she asked for. Franchises will continue to be awarded on the basis of completely open and transparent published criteria. Frankly, I do not care about the political allegiance of anyone running the railways; all that I want is for them to work and for the trains to run on time. That might not be a very high ambition but it is all that I want, and I doubt whether the public will care whether it is the Tories, Labour or even the Liberal Democrats who manage to do that.
	Secondly, safety is of course of paramount importance, but we believe that it should be integrated more closely with other issues, which is why we want to combine the Health and Safety Executive's functions with those of the Office of Rail Regulation. The ORR will shortly consult on how it will organise itself to ensure that both its primary functions—economic regulation and safety—can be properly discharged.

Russell Brown: On accident reports and investigations, schedule 3 states:
	"The Office of Rail Regulation may authorise a person to investigate and . . . report on any accident".
	Is that not duplicating the current work of the rail accident investigation branch, or is the intention to complement or supplement that work?

Alistair Darling: I see such work as complementary. It has been agreed that, from next year, when the RAIB is established, it will take the lead in the event of an accident, go to work as quickly as possible, find out what has happened and report as soon as it can, thereby operating in much the same way as the air accidents investigation branch and the marine accident investigation branch, which have worked very well for a number of years. In order that the rail regulator can discharge its safety obligations, it may well want to examine some of the issues arising from such incidents. What we are putting in place is a complementary system. On too many past occasions, there have been a number of people with a legitimate interest in investigating such matters. This will be a far better way of working.
	My hon. Friend the Member for Dumfries (Mr. Brown) will doubtless want to pursue this issue. If he is lucky enough to get a place on the Standing Committee, those of my hon. Friends who share that pleasure with him will be happy to go through the memorandum of understanding involving the RAIB and other organisations. However, I think that he will find that the system is complementary.

Patrick McLoughlin: The Secretary of State seems to be saying that he wants to set up an organisation similar to the AAIB and the MAIB, but I think that I am right in saying that there has been no public inquiry into an air accident in this country since 1967. When the Government took office, they launched a public inquiry into the incident on the River Thames involving the Marchioness, even though the MAIB had already been set up. Is the Secretary of State saying that he hopes that, if the RAIB secures the same reputation as the AAIB, he would see no need for public inquiries in future?

Alistair Darling: No. First, the RAIB was in fact set up in legislation passed last year—this Bill is not setting it up—and it is due to come into operation early next year. Secondly, of course, no Secretary of State will ever be in a position to say that there will never be a public inquiry. The principal way in which such matters are handled is through the prerogative powers that Secretaries of State can exercise, and it would be very foolish to rule out such a possibility. What I can say is that I hope that the RAIB will do as the other investigation branches have done and satisfy many of the requirements that have hitherto led to calls for a public inquiry. Certainly, the MAIB and the AAIB—thankfully, major air accidents are comparatively rare—have proved very effective in getting to the bottom of such incidents, mainly because they begin on a no-blame basis, get on site and find out what happened. Certainly, of the three transport modes, air is probably the most mature in that everyone in an air accidents investigation branch is not bothered about whose fault it is; they just want to know what happened to ensure that it does not happen again. Ideally, that is precisely where we should be in respect of the railways.
	I am not sure that the hon. Member for West Derbyshire (Mr. McLoughlin) was in his place when I made my statement following the recent accident at the level crossing in Ufton. What was good about those proceedings was that, rather than adopting a mood of identifying who was to blame, people focused on what was necessary to find out exactly what happened.
	Thirdly, to return to the Bill, the Government want further to devolve decision making for public transport, including rail, to the Scottish Executive, the Welsh Assembly and to passenger transport executives, and a substantial part of the Bill deals with that.

Paul Truswell: rose—

Alistair Darling: I will give way shortly; I believe that I know where my hon. Friend is coming from.
	We believe that, where it is possible to devolve powers, it is right to do so, because it makes for better transport planning. As to PTEs—

Paul Truswell: rose—

Brian H Donohoe: rose—

Alistair Darling: Hold on a moment. I promise that any hon. Member who wants to intervene will get to intervene, unless you, Mr. Deputy Speaker, call the Adjournment or something like it. It may be helpful to the House to say that I intend to say a few words about PTEs in England, then speak about London, then go to Scotland—actually, I would love to go to Scotland, but not just yet—and then back to Wales. My first subject is PTEs, so does anyone want to intervene?

Paul Truswell: Does my right hon. Friend acknowledge the important role that passenger transport executives have played in securing, developing and monitoring rail services during some very difficult post-privatisation times? If he does, why is he seeking to reduce and remove so many of their existing powers and, if he is mindful of restoring those powers under the Bill, would that not represent an unnecessarily bureaucratic and confusing process?

Alistair Darling: No, quite the opposite. I am glad that my hon. Friend intervened because I thought that he might say what he did and it provides me with an opportunity to explain what we are doing. At the moment, franchises are the joint signatory of both the Strategic Rail Authority as it is now and the PTEs. In some cases, where the franchises involve more than one PTE, they have more than one or two parties to the contract. That means that it is complicated, because more parties are involved in the negotiations, and it can lead—let us be blunt about it—to a lot of horse-trading. At the moment, the PTEs do not have to meet the full consequences of the services that they specify because it all comes ultimately from the Government. In operational terms, we can end up with more and more services being purchased to run through a network that may not be able to take them. It may not be able physically to do so. My approach was to try to simplify the structure as much as possible, to make it less complicated and therefore less expensive. The more people involved, the greater the expense.
	I agree with my hon. Friend that the PTEs are very important, not least because they must have regard to all transport within their area—not just railways, but light rail, buses, cars and so forth. The Bill provides that the Secretary of State must consult the relevant PTEs before issuing an invitation to tender, so the Secretary of State knows what the PTEs want to buy. If they want to buy more services, they can do so; if they want fewer, we intend to arrange it for them to receive the money for that and be able to spend the remainder on other things as well. In other words, they will be given greater power.
	The Bill is necessary to ensure that we have a far simpler system than the one we have at the moment. Since the publication of the White Paper, I have made one change that was not contemplated in it. Because it may be necessary, for contractual reasons, to have the PTE as a signatory, it can, at the invitation of the Secretary of State, be a co-signatory, if necessary. PTEs thus have nothing to worry about in respect of their interests, which will be taken into account. There is a statutory obligation to listen to what they have to say. What we are doing is to streamline the procedure and, critically—I make no apology for it—I am determined that, in future, if PTEs can buy more services, they must accept the financial consequences of what happens. The present position is a nonsense.

Anne McIntosh: The position in the constituency of the hon. Member for Pudsey (Mr. Truswell) may not be quite the same as the position that the Secretary of State has set out. What is the position when a PTE has entered into a franchise agreement already? Can it be retrospectively altered? For example, Nexus in the north-east has committed to making further improvements to the metro in Newcastle and Sunderland and to improving railway stations. Will its position be altered by the Bill?

Alistair Darling: No, because it is a general rule that legislation is not retrospective, except with the express consent of the Law Officers. The Bill will apply to new franchises. Existing franchises may be varied if that is agreed, but the Northern franchise was signed relatively recently. I remember an example that led me to believe that we needed a simpler way to deal with such negotiations. In the course of the negotiations on the Northern franchise, it emerged that one PTE had one service a day that went into the Northern franchise area, but it was able to hold up negotiations because it wanted something in its own franchise area. That is not a very satisfactory way of proceeding.

David Clelland: Notwithstanding what my right hon. Friend has said about the safeguards that he hopes to build into the Bill for PTEs in the future, does he agree that removing them as co-signatories to franchises weakens their position with franchisees? Can he give some examples of the difficulties and complications that the present system has caused?

Alistair Darling: It would not weaken the PTEs' position. The newer franchises have a far greater degree of specification—of performance and so on—than the older ones. Those specifications can be enforced in the future because a contract to provide services can be enforced by the Department, which will be the contracting party. My difficulty with what my hon. Friend says is that negotiations have not been a matter only for the PTE and the SRA—or the Government in the future—and the TOC. Often, negotiations have been between the PTE and the Government or the SRA. Those discussions have held matters up on several occasions. To put it bluntly, sometimes matters have been resolved by a compromise under which the Government pay some money to the PTE. I can see why the PTEs might think that that is a jolly good arrangement, but it is not, to coin a phrase, a very good way to run a railway.
	We are trying to develop a rational system that is simpler than the present one. It will not diminish the role of the PTE. Indeed, what we propose—this is the whole thrust not only of the railways White Paper, but of the transport White Paper published a few weeks later—is that over time we will decentralise funds as far as possible to give the PTAs greater power and, crucially, to give them greater flexibility. At the moment, railways are regarded as somehow different from the transport that PTEs do, such as bus and light rail, but they should all be considered together. In some circumstances, it might not be right to run heavy rail because light rail would do the job better.
	We are planning to give the PTEs greater power; when they get greater control over the money, that will provide greater influence over the TOCs. No doubt such matters will be explored further in Committee, but our proposals are an improvement. I know that a group has been organised in the past two weeks to campaign against the proposals, but its concern is misplaced.

Graham Stringer: Will my right hon. Friend give way on that point?

Alistair Darling: Yes, but then I am going to London.

Graham Stringer: While he is still in the metropolitan areas, I remind him that I chair the group that he has just mentioned. Will he agree to a meeting with us so that we may make representations on that issue?

Alistair Darling: I am sure that either my hon. Friend the Minister of State, who will take the Bill through Committee, or I will meet my hon. Friend. I have always made it clear that it is one of the responsibilities of Ministers to meet their colleagues and I am sure that we can arrange an opportunity to go through the arguments.
	In relation to London, let us again be clear what we are talking about. The Mayor and TFL have substantial responsibility for most of London's transport. It is logical that, if we can bring rail travel within the Greater London authority closer to what TFL is doing, it will provide a better transport system for the public, not least in relation to fare structures and ticketing. At the moment, it is sometimes difficult to work out why it should cost more to go between one place and another by rail, by bus or by tube, so the principle of greater co-operation is a good one.
	In relation to the Silverlink services in London, which run within the GLA boundary—with the exception of the service that goes to Watford—it seems sensible to say that if TFL is responsible for transport in London, it should look after those as well.
	The allegation that sometimes arises, certainly from the Conservatives, is that, somehow, we will give the Mayor of London power over all the services that run into London. The hon. Member for South Suffolk is right: about 70 per cent. of train services in this country go to London. There is no way that we will hand over power for those services to the Mayor of London. What I said was that there may be a case, in discussion with the local authorities that surround London, for looking at services—especially commuter services—that come into London where the Mayor wants to specify greater stopping in his area. Clearly, that would have a knock-on effect on services going outside London. That needs to be discussed. That will be done on a slightly longer timetable—it will not happen imminently—but any sensible transport planner would accept that we need to consider the way in which those services are organised.

Jeremy Corbyn: I thank the Secretary of State for giving way on the question of London, before he goes off to Scotland. In his proposals for Scotland, the Scottish Parliament will be given control over the track. I welcome and support that. Does he envisage a situation where TFL and the Mayor would have control over trains in London, as well as the track infrastructure, particularly on the entirely suburban cross-London routes that are not inter-city by any stretch of the imagination?

Alistair Darling: No, I do not, and I had better explain why. In Scotland, most of the railway network is operated by one franchise, ScotRail. Although the Anglo-Scottish services run up to Glasgow, Edinburgh, Aberdeen and Inverness and include one or two sleeper services, the dominant provider of trains is ScotRail. The track will remain under the ownership of Network Rail, but the Scottish Executive are largely involved in specifications, enhancements, improvements and so on for ScotRail, the dominant operator, so it makes sense that they should specify what is appropriate for the track. Bluntly, if they want to open up services or take them away, that is a matter for them.
	The situation is almost the opposite in London. As I said, 70 per cent. of train services in this country come into London, and a large number of them start well outside London. It would be very difficult—in fact, itwould be administratively and operationally impossible—to extract those parts of the track in London that no one else but London uses. I do not understand the strength of doing that, so we do not propose to do it.
	However, we recognise that where something is wholly within London—such as, for the most part, the Silverlink Metro services—it is logical that TFL should take it on. In relation to services that go outside London, if commuter services might usefully take people to places with no transport links in London, that ought to be discussed. But I repeat that it can be done only after discussion and a general agreement on the way forward with the surrounding local authorities. I am sorry to disappoint the hon. Member for South Suffolk, who would love us to propose a rather different policy, but there is no question of giving the Mayor say over trains that run outside London. That is not what we are proposing at all.

David Wilshire: TFL representatives tell me that they want to get their grubby little hands on all the tracks and stations in my constituency and that they plan to improve facilities by increasing fares. What guarantee can the right hon. Gentleman give to my constituents that the extra fares that they pay to TFL will be spent in my constituency, and not on some grandiose, half-baked scheme that Ken Livingstone thinks up?

Alistair Darling: I would be surprised if TFL put the proposals in the way that the hon. Gentleman describes. I do not want to repeat myself, but we have no plan at all to transfer the track, as I was just explaining to my hon. Friend the Member for Islington, North (Jeremy Corbyn); the hon. Gentleman is wrong on that.
	Let me now deal with Scotland and Wales, although I have almost explained the Scottish policy.

Brian H Donohoe: Will my right hon. Friend give way?

Pete Wishart: Will the Secretary of State give way?

Alistair Darling: I shall let both hon. Members intervene, but let me say first that the Scottish Executive has run the ScotRail franchise for two or three years, and the arrangement has worked well. There will have to be a transfer of resources to reflect the fact that the Executive is to take over responsibility for specifying what they want in terms of track; that is now being discussed.

Brian H Donohoe: Will that allow the Scottish Executive to have what is called vertical integration, so that one company is responsible for both track and the train operating company?

Alistair Darling: No, but the position in Scotland is better than in some other parts of the country. Network Rail and the TOCs are now setting up joint control rooms, so that ultimately, when the number of franchises has been reduced, we will have alignment between the Network Rail regions and the single franchises, which will allow closer co-operation between track and train. That is much easier in Scotland, because ScotRail is the dominant operator; although, because of the Anglo-Scottish services, it is not the only one.

Pete Wishart: I have been keen to intervene to congratulate the Secretary of State on overseeing the biggest devolution of power since the Scotland Act 1998 was passed. It confirms the view of devolution as a process, not an event. Hopefully, the Railways Bill will represent the first of many steps in that process. However, can the right hon. Gentleman convince the House and Scottish Ministers that resources will follow the devolution of powers, so that the Scottish Executive can pursue their objectives in the coming years?

Alistair Darling: The Scottish Executive are well provided for thanks to the excellent spending settlement for the next three years that we were able to make in the summer because of the strong state of our economy and the strength that we derive from being part of the United Kingdom, something on which the hon. Gentleman might want to reflect. He should not count on a stream of further devolution measures regarding the railways; the Bill is sensible and practical, but it is all that is required.

Geoffrey Clifton-Brown: Returning to the subject of London, clause 15(3) refers to consultation that must take place before an invitation to tender for a franchise agreement is issued in respect of services that
	"are or include London railway passenger services".
	Given that 70 per cent. of all rail services pass through London, is not the Secretary of State setting up a huge bureaucracy, whereby he must consult and agree with the Mayor of London before such invitations are issued? If not, what will happen if there is disagreement between the two?

Alistair Darling: No, that is not so. The hon. Gentleman is letting his imagination run riot. The franchises will be awarded through a division within the Department for Transport set up for that purpose. Yes, we have to consult all sorts of people where appropriate, but the position will be infinitely simpler than it is now.

Iain Luke: I welcome the proposals that will lead to the Scottish Executive having more influence in discussions with the Department for Transport and Network Rail on the strategic objectives of the system as a whole. That will require resources to be transferred. Is it clear that the Scottish Executive will be responsible for all improvements to rail infrastructure throughout Scotland, including the whole of the east coast main line from Edinburgh north?

Alistair Darling: The Scottish Executive will be responsible for specifying and paying for those enhancements that they want. As for the east coast main line, the Scottish Executive might want to administer a series of comparatively minor upgrades, but so might Network Rail, depending on its requirements for, say, Anglo-Scottish services. However, the White Paper makes it clear that if a major upgrade were in prospect like the one for the west coast main line, the decision would be made by the Department for Transport in association with the Scottish Executive. However, the Scottish Executive could decide to upgrade the line from, say, Edinburgh to Aberdeen—a stretch that my hon. Friend knows something about—if they chose to expend their resources in that way. The Executive will now have that power, which I think is a major step forward.
	Under the asymmetrical devolution that we have in this country, each part of the country has to be dealt with differently. The Welsh Assembly Government will be able to, and will, specify the Wales and Borders Trains services, but we will remain responsible for the few Wales and Borders Trains services that operate wholly within England. That is consistent with devolution.
	The Bill includes greater powers to make it easier to change services. Earlier, I spoke about wanting to encourage better decision making when choosing between heavy and light rail and so on. Such procedures must be changed because the SRA is going, but the procedures will be much better than those we have at present. Changes to the Rail Passengers Council have been largely instigated by the council itself to enable it better to represent passengers' needs and have been welcomed, by and large.
	I said that there were other changes that do not require legislation. Network Rail will be given clear responsibility for operating the network and changes to the agreement between Network Rail and the Department are being discussed at the moment. In reply to my hon. Friend the Member for Cunninghame, South (Mr. Donohoe), I said that track and train companies must work together more closely.
	The House may be interested to know that, in January this year, I opened the first joint control centre between Network Rail and South West Trains. In the first nine months, performance has improved by 35 per cent. If anyone had any doubts about the wisdom of separating track and train, which was contemplated by the authors of privatisation, that example shows that there is a huge difference in performance, which will continue. I also said that there would be a reduction in the number of franchises; on 19 October, I said that they would fall to 19, and that there would be a further reduction to align them with the Network Rail regions. Network Rail will take over responsibility for drawing up utilisation strategies to make the best use of the network. Finally, the discussions on the rolling stock companies are continuing.
	Before I conclude, I ought to do justice to the amendment tabled in the name of the Leader of the Opposition; it is only a courtesy to do so. I do not want to labour the point, but while it is critical of the Government, as one would expect, it is hardly illuminating about what a future Conservative Government might do. That is curious; at this stage in the electoral cycle—unless the hon. Member for South Suffolk is a 2006 man—one would have expected the Conservatives to give a hint of what they would do in the unlikely event of their being returned to power.
	The hon. Gentleman is silent about the £1.8 billion-worth of cuts that he would impose. Implicit in his amendment is his wish to keep the SRA, given that he is critical of the changes that we are making to abolish it. I should tell him that Mr. David James, who was hired by the Tories to look at efficiency savings, has banked the savings that derive from abolishing the SRA. I was therefore surprised by the amendment, until my attention was drawn to something that the hon. Gentleman said in an environmental publication in September:
	"There's no commitment to implementing these recommendations"—
	the efficiency savings—
	"I'd be surprised if there is not some scope for efficiency savings but whether those are of the order that the James committee suggested I don't yet know. It isn't a priority for me—it's much more important to get our policy indicators clear so people know exactly what we stand for."
	The hon. Gentleman has shot himself in the foot regarding savings; at the same time, he has disappointed us, as we do not have a clue about where he stands. We do not know what the Conservatives' policy is, except that they want to cut £1.8 billion from spending on transport. It is difficult to see how on earth we could have an effective railway system, especially as they have some history, or baggage, as the privatisers of the railway, which led to so much difficulty.
	I believe that the railways in this country have a very good future. I accept that there are difficulties and problems to be overcome—reliability, for example, needs to be improved—but we now have the funding and management, and the right organisation, for the railways to make sure that they carry more people and freight. I am optimistic about the future of rail, and I commend the Bill to the House.

Tim Yeo: I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:
	"this House declines to give a Second Reading to the Railways Bill because it increases the extent to which politicians and civil servants interfere in the running of the railways; gives the Mayor of London power over train services which begin or end beyond the boundaries of the Greater London Authority; perpetuates instability in the rail industry with regard to franchising; fails to encourage additional private investment; offers nothing to improve conditions for passengers and the travelling public; and exposes the Government's continuing disarray over the strategic direction of the industry."
	I shall start by helping the Secretary of State, who looked frightfully pleased because his researchers had dug out a quotation from some remarks that I made in September about the recommendations of the David James committee. Had he or his researchers done their homework properly, they would have discovered that those remarks of mine made in September referred specifically to the David James committee recommendations in respect of the Department for Environment, Food and Rural Affairs, and that the more recent recommendations of the David James committee were, when published last month, accompanied by a specific statement from me, which said that any savings that were achieved as a result of those recommendations—I believe that significant savings will be made—will of course be redeployed entirely in the transport field. So I am grateful to the right hon. Gentleman for drawing attention to that point, which has clearly been causing some confusion in his mind and that of this staff.
	The Secretary of State said that the Bill was needed to put right aspects of privatisation. Even by his standards of accuracy, that is a pretty extraordinary claim, because everybody knows that there is one reason, and one reason only, why the Government have introduced the Railways Bill: it is because they need to put right one of their own blunders. The right hon. Gentleman lapsed into his slightly more patronising style, as he does from time to time, when he said that it was some years since I had been in government. That is absolutely true. It is also true that he has been in government for quite a long time. One of the hallmarks of people who have been in government for quite a long time is that they acquire a complete inability ever to admit any mistake by their Government.
	The Secretary of State would have been a great deal more convincing this afternoon if he had recognised publicly even for an instant that the Strategic Rail Authority was an utter and total failure. It turned out to have no strategy, no railway and no authority. Five years ago the Deputy Prime Minister said:
	"The Strategic Rail Authority will put railways at the centre of an integrated transport system".
	I wonder how that ties in with the decision of the Strategic Rail Authority to end the dedicated Gatwick express. I thought the Gatwick express was quite a good example of integrated transport, so that an international traveller, coming off an overnight flight, is at least guaranteed a seat. But the SRA, the body which the Deputy Prime Minister himself said would put
	"railways at the centre of an integrated transport system"
	is proposing to put an end to the Gatwick express, so that international air travellers will come off an overnight flight and have to stand all the way to London because some commuter has got their seat, having got on the train at Hayward's Heath.
	The quotation from the Deputy Prime Minister continued:
	"with proper public accountability and investment, putting the passenger's interest at the top of the agenda in a long-term strategic framework with the focus on a plan for growth."—[Official Report, 20 December 1999; Vol. 341, c. 539.]
	In 2001, Labour's election manifesto stated that the Strategic Rail Authority would provide a clear, coherent and strategic programme for the development of the railways so that passenger expectations are met. Just two years ago the Department for Transport's own review of the 10-year transport plan said that the SRA would provide
	"the firm leadership envisaged for it, that of providing strategic direction and funding for the rail industry."
	Today the Secretary of State is consigning the Strategic Rail Authority to the dustbin. Predictably, its failure has not led to a single ministerial resignation, even though £250 million of taxpayers' money has been wasted.

Jeremy Corbyn: As part of the public catharsis that he wants us all to go through, will the hon. Gentleman say a word about the fantastic costs of privatisation, the waste of resources that accompanied it, the sale of assets by Railtrack and the huge public subsidy to private rail operators that has often disappeared into profits? Does he not think that even a moment's apology for the privatisation strategy is worth giving at this time?

Tim Yeo: Indeed, I intend to touch on some of those issues later in my speech. It is significant that none of the issues that the hon. Gentleman has just raised are among the areas of policy that the Government are proposing to change. They have accepted hook, line and sinker every one of the points about which the hon. Gentleman seems so upset. My concern was that the Secretary of State has not admitted to the House that the reason he has to introduce the Bill today is that the Government made a blunder of the hopes that they had for the Strategic Rail Authority. Those hopes turned out to be unfounded.
	For the avoidance of doubt—the Secretary of State seemed rather confused on this point—the Conservative party does not oppose the abolition of the SRA, but we condemn the muddle and incompetence of a Government who have had to oversee such a massive U-turn in the centrepiece of their railway policy—a Government who, after almost eight years of responsibility for railways, find that the main change that they need to make is to reverse one of their own decisions.
	There are some aspects of the Bill that we do accept, such as the transfer to the Office of Rail Regulation of the functions previously carried out by the Health and Safety Executive, but we have very strong objections to several parts of the Bill, as our amendment makes clear and as I shall explain. The fundamental problem is that the Bill gives politicians and bureaucrats far more say in running the railways. That is the precise opposite of what the Government should be doing. Indeed, the only hope for railways is leaving management to get on with providing the service that customers want without constant political interference. Unfortunately, nothing in the Bill—not a single clause—will make life better for passengers, make trains more reliable, encourage more investment in the railways or increase the amount of freight carried on the railways.

Alistair Darling: Purely as a matter of interest, where would the hon. Gentleman transfer the SRA functions on the awarding of franchises and so on?

Tim Yeo: As I have implied, my view is that the companies that are closest to the customers should be given a bigger say, not a smaller one, in how the railways are run. I would discuss with the operating companies how the process of franchise allocation can best be made totally independent of political interference. The system that the Government have set up—I shall return to this point presently—increases the potential ministerial interference in franchise allocation. From a Government who have shown on more than one occasion that they are willing to bend policy in response to political supporters, donors to the Labour party and so on, the Bill introduces a highly dangerous situation.

Alistair Darling: If the hon. Gentleman wants to make franchise awarding independent of the Department and of Ministers, surely it means setting up another body or quango to do it?

Tim Yeo: As I said, I propose that we will have discussions with the industry and with those who are most affected by this policy area about how to ensure that important decisions about the allocation of franchises are taken out of the hands of Ministers.

Gwyneth Dunwoody: Will the hon. Gentleman give way?

Tim Yeo: In a moment.
	It is not clear now what the Government think the railways are for. Are they there to carry commuters, run services between big cities, maintain rural and cross-country lines and to carry freight? Let us look at the record over the past seven and a half years, and in particular, compare it with what was said in the 10-year plan launched by the Deputy Prime Minister four years ago. According to that plan, trains were to be made more punctual. In practice, twice as many trains now run late as did so in 1997. According to the plan, the amount of freight carried on railways was to increase by 10 per cent. by 2010. In practice, in the past two years, the amount of freight carried has fallen. According to the plan, Thameslink 2000 and the East London line were both to be built by 2010. In practice, those targets cannot be met. Ministers promised that rail fares would not rise faster than inflation. In practice, they have done so, and the latest increase last week amounted to 4 per cent.—the second 4 per cent. rise in only two years. Last but not least, the British Transport police have just reported a worrying increase in violent crime on and near to the railways.
	In summary, after seven and a half years of Labour government, train fares are up, trains are running later, freight is falling and new projects are either postponed or cancelled. Just last week, we learned that because Network Rail could not inform train operators of where it would be working on the lines over the Christmas holidays until extremely late in the day, the operators could not publish their Christmas timetables in a timely manner, thus making it hard for people both young and old, who particularly depend on the railways at this time of year to see their families, to make their plans.
	I acknowledge that the situation on the railways is not bad in every respect. As the Secretary of State said, the number of passenger miles travelled is now at its highest for more than half a century. Investment in the railways has also risen sharply since the private sector became directly involved in their operation. Neither of those important achievements could possibly have occurred if the railways had remained entirely in the public sector, as the Secretary of State acknowledges.
	I shall now set out some of our concerns about the Bill. First, as I said, it gives politicians more control over the railways. Let us start with London: more than two out of three of all train journeys begin or end in London, which is central to the success or failure of the railway system. If the Bill is passed, the Mayor of London, Ken Livingstone, will have a direct say in the running of all trains coming in and out of London, rather than trains that serve the Greater London area only. Clause 15 requires the Secretary of State to consult Ken Livingstone on how tenders for franchises are handled and allocated, on whom franchises are allocated to and on the terms on which franchises are allocated. It specifies that those powers, which Ken Livingstone will exercise, will apply to rail services anywhere in the country that begin or end in London.
	I am glad that the Secretary of State is reading the Bill, because he may discover something that he did not acknowledge in his speech. Clause 15(7) defines a "London railway passenger service" as one which includes trains that travel to or from places outside Greater London. It is clear that the Secretary of State has not read the Bill, which he is examining with great interest. I know that he cannot wait for a Cabinet reshuffle—he has never shown great enthusiasm for his present brief—but he is deluding himself if he thinks that the Bill does not give Ken Livingstone the powers that I have described. If he thinks otherwise, he has obviously failed to read his own Bill.

Geoffrey Clifton-Brown: I intervened on the Secretary of State on exactly the same point. My hon. Friend will have heard the Secretary of State's complacent reply that the measure will not increase bureaucracy and council tax for the people of London and that it will not lead to inflation-busting fare increases. Given the record of Transport for London, of which the Mayor is in charge, on running the tube, on which fares have increased hugely, and the fact that the council tax for London has increased by more than 50 per cent. since the Mayor took over, does my hon. Friend think that the Secretary of State has any credibility on that matter?

Tim Yeo: My hon. Friend has made a powerful point succinctly, and he is right. The Secretary of State has tried to deny the contents of his own Bill, the effects of which will be exactly as my hon. Friend has described. I shall enlarge on those effects, because if the Secretary of State has not read the Bill, it is even less likely that he has read the regulatory impact assessment, to which I should like to draw hon. Members' attention.
	The RIA makes it clear where the Bill is heading. According to it, clause 16 has been worded to ensure that there is
	"flexibility built into the legislation that allows the Secretary of State to potentially extend the mayor's responsibilities for London rail services"—
	remember that the Bill defines those as any train that begins or ends in London, regardless of how far outside the Greater London area it travels—
	"in line with policy development."
	The RIA admits that
	"potential costs include the risk of greater interference in the rail industry imposing delay and higher costs on train companies. There is also a risk that projected passenger benefits do not materialise . . . as previously noted, the incremental costs associated with policy implementation are not yet known."
	The RIA blows the gaff.
	I wonder what persuaded the Secretary of State, of all people, to give Ken Livingstone those powers. Was it the cost-effectiveness of the congestion charge, which, as hon. Members know, costs £97 million to administer and raises £68 million after expenses? Was it, as my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) has suggested, the rigorous way in which Transport for London has negotiated holiday entitlements for tube workers? Does the Secretary of State think that giving Ken Livingstone more power will make it easier to attract investment into the rail industry, and are the train operators clamouring for such a change?
	One group of people who I am sure do not seek such a change are commuters who travel into central London from outside Greater London. They may find that instead of services being developed that make it easier for them to travel in from stations such as Colchester and Manningtree, which many of my constituents use, the congested tracks on which those trains travel may be occupied by services designed to suit the needs of Ken Livingstone's voters in the Greater London area.

Tom Harris: I wonder whether the hon. Gentleman is making too personalised an attack on the Mayor of London. He has already mentioned the name Ken Livingstone six or seven times. The hon. Gentleman is, in effect, speaking against the principle of consulting locally elected politicians about rail services. If he is opposed to that power going to the Mayor of London, is he also opposed to provisions in the Bill that allow Scottish Executive Ministers to make exactly the same decisions about journeys that begin or end in Scotland?

Tim Yeo: No, because the situation as between Ken Livingstone and Scotland is wholly different. I mention Ken Livingstone because, as he happens to be Mayor of London, he is the person to whom these powers are to be transferred. Members of the Government might wish it otherwise; they might think, for example, that Steve Norris would have made a better Mayor. I mention Ken Livingstone also because his record of running almost any kind of service is one of appalling waste and extravagance. I can scarcely think of a single politician less suited to being given the responsibility that the Bill bestows upon him. The situation in Scotland is wholly different. Only a tiny fraction of the services for which the devolved Executive is responsible go outside Scotland, whereas a vast number—in fact, the majority—of services for which Ken Livingstone will be responsible begin or end outside London.
	Let us move on from Ken Livingstone. Another big gainer of power is Network Rail. Having sought and obtained control over train timetables, its new responsibilities include devising route utilisation strategies, directing network operations, driving up operational performance, and delivering infrastructure maintenance and renewal. That sounds pretty impressive, but to whom exactly is Network Rail accountable? Certainly not to its shareholders, because it does not have any; certainly not to passengers, because it is not burdened with the inconvenience of coming into direct contact with them; and scarcely even to its members, one of whom wrote to me a few days ago, rather plaintively pointing out:
	"We are appointed via a mystery process . . . We have no sanctions over the board . . . Unless Network Rail call the meetings we cannot claim expenses."
	It does not sound as though the management of Network Rail has much to fear from anyone. I worry about the effect of that on services. Network Rail's first responsibility, as the Library paper helpfully points out, is to the track. It has no incentive to attract extra passengers on to the railways; indeed, it will be able to cut services if they interfere with its duty to maintain the track. It sounds suspiciously like the worst periods under British Rail, when, having complained about the poor service offered to my commuter constituencies in South Suffolk, I was often left with the impression that it would be able to run the trains much better if it did not have so many passengers to bother about.
	What is more, how can we be certain that Network Rail, with its monopoly position in the industry, far-from-transparent operations, unconventional structure and curious lack of accountability, is operating efficiently? Are the cost and speed with which the railway infrastructure is maintained and improved in Britain comparable with the performance achieved in other countries?

Alistair Darling: Again purely as a matter of interest, can the hon. Gentleman tell us what his proposals for Network Rail are? Would he keep it, or privatise it, or nationalise it?

Tim Yeo: It is pretty clear that there is no possibility of Network Rail's being privatised, given the way in which the Government treated its predecessor body, Railtrack. That matter is still being pursued through the courts. If there had been any wish on the part of the Government to try to boost private sector investment into Network Rail, that wish was greatly obstructed by the way in which Railtrack's assets were seized by the Government and those associated with them.

Alistair Darling: I must press the hon. Gentleman for an answer. What are his proposals for Network Rail?

Tim Yeo: It is impossible to privatise Network Rail, because of what this Government did previously. No one is going to put money into assets that the Government seized from a predecessor body, so we have ruled that one out, at least for the foreseeable future. What is needed is a review of the structure of Network Rail to give it a clear line of accountability to passengers; to its customers, the rail operators; and, if necessary, to Parliament. However, it is clear that it suits the Government to be able to hide behind Network Rail. They will say that the industry is not nationalised or part of the Department but part of a separate body, which nobody quite knows how to call to account. I daresay my hon. Friends have had the same experience as me. It is difficult, even for those of us on the Front Bench, to get information about exactly what Network Rail is doing.
	What incentive is there for Network Rail to speed up the exploitation of its huge property assets? For more and more rail passengers, getting on a train at a provincial station is the same today as it was 100 years ago. The contrast between airports, which are firmly in the 21st century, and most stations, which remain in the 19th century, is painful. Massive amounts of capital can be drawn in from private investors for the benefit of the rail industry, without taxpayers or passengers having to fork out a single penny, simply by unlocking the huge potential of brownfield development opportunities in and around stations. Unfortunately, the Bill will make that process harder rather than easier.
	The train operating companies are among the losers from the Bill. Their response has been muted so far, but it is hardly surprising when one realises that another change in the Bill would give the Secretary of State and his civil servants direct control over the allocation of franchises. Woe betide any train operator who dares to point out that the Bill does nothing to help passengers but merely cushions the lives of Ministers and bureaucrats. What chance would such a company have of getting a new franchise even if it was delivering a high quality service for its passengers? The nature of the changes in the Bill will silence opposition from potentially well informed sources, such as train operators, who are much closer to rail users than Ministers, civil servants or Network Rail will ever be.
	There is no longer any pretence that the process of franchise allocation is independent of political interference. However, we know that passengers rank pretty low in the Government's priorities. That is clear from the changes to the way in which lines can be closed in future. Would it not be great to have a Bill that dealt with making it easier to open railway lines where demand existed? There is not much chance of that from a Secretary of State who has kicked almost every project for expanding railway capacity into the long grass.Unfortunately, the Bill is not about making it easier to open railway lines but to close them. To be more precise, the measure makes it easier to close lines and ensure that someone other than the Secretary of State gets the blame.
	The rail network has remained roughly constant in size since one third of it was chopped in the Beeching cuts of the 1960s. It is widely assumed that the Government's latest wheeze, dressed up in the cuddly title of "the community rail development strategy" is little more than a smokescreen behind which Ministers will try to conceal a new round of Beeching-style cuts. It is a pity that the Secretary of State has not had the courage to come clean about that. After all, it is possible to make a logical case for saying that railways should concentrate on commuters, inter-city journeys and freight. If the Government thought strategically, they might want to do that. However, their transport strategy, like their strategy in almost every other policy area, is simply about spin and massaging public opinion.
	The community rail development strategy transfers more responsibility for financing rail services to passenger transport executives—although, significantly, it does not transfer any extra money to them—while simultaneously taking away from those executives their role in determining the local rail franchises that should be awarded. To provide extra local services, a PTE must get approval from Network Rail. Since Network Rail cannot tell us, with three weeks to go, who can run services over Christmas, one can imagine the difficulty a PTE might meet if it had the cheek to say that it wanted to run a new service.
	No such problem arises, however, if the local PTE wants to cut a service. In that case, it is free to switch the spending to "other transport modes" as the White Paper delicately puts it. That means a bus. Although Network Rail is there to block the provision of new train services if some of its engineers want to do that, there is no comparable hurdle to starting a new bus service, however congested the roads that the service may have to use.
	An interesting insight into where the Government's sympathies really lie is provided by the fact that when new rail services are considered, the extra infrastructure costs and compensation to other operators must be calculated in advance and paid by the local passenger transport executive. In the case of new road services, however, such considerations apparently do not apply. In the White Paper, this is all hilariously described as "streamlining". What it really means is that the Government want to shift traffic from trains to buses, but do not want to say so, and—most of all—do not want to take the blame for the rail closures that they are planning.
	I am not against facilitating decisions about new forms of transport service—light rail, guided buses and so on might well have a bigger role to play in the future—but I am utterly against a policy of closure by stealth, which has been designed to ensure that when closures are carried out, the local passenger transport executive will be blamed, although the Government are actually responsible. Furthermore, I share the concerns of the PTEs about the way in which the Secretary of State is removing some of their powers. Kieran Preston, the chairman of the Passenger Transport Executives Group, has said:
	"it makes no sense to hand over the planning and management of regional rail networks to unaccountable civil servants in Whitehall who lack the local knowledge and expertise".
	I turn now to an important relationship that the Bill will change: the relationship between the Secretary of State and the Office of Rail Regulation. Again, the change that the Bill will introduce increases the power of the Secretary of State and cuts that of the independent regulator. The effect of the change will be a return to the days when capital spending on the railways was subject to constant Treasury cuts, the consequence of which was the largely clapped-out rail infrastructure that resulted from half a century of state control.
	At present, for all its flaws, the Office of Rail Regulation can act as a driver for new investment. Through the way in which it sets access charges, it can help to ensure that sufficient money is attracted to renewing and improving the network. The Treasury has now taken fright, however, at the way in which that process breaches its own power to exercise absolute control over public spending. I understand why the Treasury has taken that view, but the consequences are significant and potentially damaging. The terms of schedule 4 of the Bill make it clear that in future, whatever the Office of Rail Regulation decides in relation to access charges can be overruled by the Secretary of State. In the absence of assurances from the Secretary of State about funding levels, we have to assume that the Department for Transport will be under constant pressure to make such cuts.
	The change will have another serious consequence. Until now, the Office of Rail Regulation has had the power to set access charges and a duty, in doing so, to apply an important list of statutory criteria, such as the promotion of efficiency and economy in the industry, the interests of freight and passenger users of the railway, and the growth and development of the industry. It is not allowed to apply political criteria, as it is recognised that the application of short-term political considerations is harmful to private sector confidence and to the medium and long-term needs of the railway industry. The establishment of independent economic regulation, free of political controls, is essential to private sector confidence and investment. That duty has no doubt provided comfort to private investors in the railways, but if they are putting money into new rolling stock and improved services, there must be at least a reasonable prospect that the infrastructure will be provided for the results of their investment to function.

Graham Stringer: I have listened carefully to the hon. Gentleman's arguments. Is he really saying that he is satisfied with a situation in which, over the past two or three years, the rail regulator has been able to add £7 billion in expenditure to the public purse without any recourse to the Government? If he is not saying that, what is he saying?

Tim Yeo: I am pointing out the consequences of the Bill. We are here to debate its Second Reading, and I am highlighting the areas about which the Opposition are concerned, which we shall seek to improve in Committee. The consequences of the proposal to allow the Secretary of State to overrule any recommendations from the Office of Rail Regulation will be quite serious, and we need to understand what they will be. The Secretary of State himself stated on 9 February that the Government
	"rules out any change to the rights of third parties, which will be protected."
	He also said that
	"maintaining fully effective and independent economic regulation is critical for retaining investor confidence. There will be no diminution in the regulatory protection of the private sector investors in the railway."—[Official Report, 9 February 2004; Vol. 417, c.1237W.]
	Just how that statement to Parliament can be reconciled with schedule 4 will be examined in more detail in Committee; just what its effects might be on future private investment in the railways may take rather longer to be revealed.

Gwyneth Dunwoody: Will the hon. Gentleman simply answer the question? Does he really think that the taxpayer should have no protection at all?

Tim Yeo: I am not suggesting that the taxpayer should have no protection. I am suggesting that when the Government effectively go back on an assurance to Parliament, the resulting instability makes it harder to attract the investment that the railways need if they are to be brought up to date.
	My worries about the Bill are reflected in the Opposition amendment. While we recognise the need for the Government to reverse the mistake that it made in setting up the Strategic Rail Authority four years ago, we remain concerned about the impact that the Bill will have on the future of the railways. Even in the darkest hours of British Rail, even when state control of the railways was unquestioned, there was never a time when quite so much power was seized by the Secretary of State and his civil servants in the Department.
	Following the SRA's demise, just who will have any duty or incentive to promote rail travel? Not the Secretary of State, not the Department's civil servants, not Network Rail, not even Ken Livingstone.
	We will pursue our objections to the Bill in Committee and during its later parliamentary stages. As a regular user of trains all over Britain, I believe passionately in their future. I believe that their role inproviding environmentally friendly, sustainable transport for freight, commuters and long-distance inter-city travellers could and should grow. I believe that that end can be achieved with far less taxpayer subsidy than is being poured into the railways now. I also believe that it will be achieved only if we draw in more private investment through intensive exploitation of the enormous assets of the rail network, if we allow train operators the freedom that they need to respond to consumer demand, and if we take politicians and officials in the Department and in London right out of the running of the railways—if, in fact, we do the exact opposite of what the Government now propose.
	The difference between the Secretary of State and me is that I want our railways to succeed and believe that left alone they can do so, whereas the Secretary of State does not mind whether they succeed or not, but does want to make sure that if they fail, he does not get the blame. Tragically, if they do fail—which will be much more likely if the Bill is passed unamended—it will not be the Secretary of State or the Government who pay the price, but the travelling public and the British economy.
	I commend our amendment to the House.

Kelvin Hopkins: I am almost aghast when I consider where to start. The hon. Member for South Suffolk (Mr. Yeo) sounded to me like the leader of a gang of vandals blaming those trying to clear up the mess for creating it in the first place. I have my own speech to make, but I could spend an hour or so simply responding to what I have just heard.
	I welcome the Bill in so far as it is another significant step away from the disasters of privatisation and back towards the sanity of public ownership of Britain's railways. I believe that it is a staging post towards transfer of power from the SRA to the Secretary of State, and towards public accountability. There are those who are concerned about that prospect because, although Ministers are known to be committed to the railways, the Department does not have a glorious record for supporting the railways. I hope that it has had a change of heart, and that it now has officials who are dedicated to the railways—as, indeed, am I. I speak as one who has travelled to work by rail every day for 35 years, and I have a considerable interest in railways, not just because I am a commuter but because I think that they are a vital part of our economy. Our economy could not operate without our railways. Indeed, I think that they should be expanded, to the benefit of us all.
	There are ongoing concerns. Indeed, there are concerns about the Bill, but we should dwell on what has happened since privatisation, because that is where the problem has lain. The costs to the Exchequer have been enormous. Public subsidies per journey have been multiplied by five in 10 years, and track renewal costs have been multiplied by four. In British Rail's time, the average cost of a mile of rail track was about £350,000. It is now between £1.5 million and £2 million. That is way beyond inflation; even if one takes account of inflation, the cost is at least three times higher than it was.
	Non-rolling stock investment has risen from about £1 billion 10 years ago to nearly £5 billion. I only wish that output had risen by the same amount. At that time there was a system for measuring output called CRWS. I cannot remember what the acronym stands for, but it was developed by BR to keep careful control of costs and ensure that it was getting value for money. That was conveniently junked by Railtrack when it took over, because it thought that markets and competition would take care of efficiency. How wrong it was.
	The privateers have, effectively, been ripping off the taxpayer with a complex network of overlapping and interlocking companies paying each other out of public money. The Treasury has been treated as a milch cow by the private companies, and that is where the money has gone.
	Let us look at some examples of how the scams operate. There are lots of agencies hiring staff to companies in the industry. Typically, an engineer may be paid £100 to £150 a day, but the agency hiring to the subcontractor will charge three times that amount, just pocketing the cash. A bridge should have cost £3 million to build but the charge was £12 million. The old BR engineers who know how much such things should cost were kept well away from the scheme, as was anyone who had anything to do with Government or the Treasury. Companies want to make sure that they get their money.
	There are frequent press reports about the proportion of profit made by rolling stock leasing companies. Typically, there is a 30 per cent. leasing charge for rolling stock. As the money eventually comes out of the public purse or from the fare payer, they are not particularly worried, but 30 per cent. return for a leasing contract is outrageous—and as I have said, track renewal costs are now four times as high as they were.
	What happens when a contract is undertaken? The company takes the specification and works rigidly to that specification, even if it is wrong and it can see that there are little mistakes, because it knows that it will be inspected, the mistakes will be found and it will get another contract to put right the mistakes that it failed to deal with in the first contract. It is making money—why should it worry?
	Contrast that with the days of BR, when track work was undertaken by direct employees working to tight cash limits and making necessary corrections when jobs were in process. The recently published Catalyst report suggests that Britain's railways, far from being inefficient, were the most efficient in Europe. There was under-investment and they were under-financed, but they were efficient. They had the lowest subsidy, but the highest productivity. One can have high productivity in an under-invested company, because to keep the show on the road, it has to operate efficiently. That is what the railways used to do.
	The shadow Minister said something recently about "ramshackle" BR—but Tom Winsor, the rail regulator, said in my hearing in the past year that BR handed over the industry to the privateers "in good order". Despite decades of under-investment, it was in good order. Engineers and people who worked directly in the industry really cared about what was happening. Contrast that with what happens now.
	Public ownership worked and privatisation does not. Under public ownership, there was direct employment. We saw the integration of operations and track work. The cash limits made a real difference. At the time, perhaps we did not like cash limits because they made life more difficult, but we have engineers in the other place who say that they worked ingeniously to use the money as best they could to ensure that they did the best possible job within the cash limit.

Peter Atkinson: The hon. Gentleman is living in an unreal world. Any passenger who travelled regularly from the north-east of England to London in the days of British Rail, and who now travels under the auspices of the Great North Eastern Railway company, would say that the service is 10 times better than it was under British Rail. The idea that the service was better under British Rail is a complete fiction. It was awful.

Kelvin Hopkins: I am not saying that the railways are worse than they were, given the billions poured into them—they receive much more money than they did—and the fact that they are now more essential because more people travel by rail. The situation was, however, one of under-investment; when the amount of money that they received is taken into account, they performed brilliantly. I could quote examples at length to demonstrate that, and I refer Opposition Members to the report by Catalyst, which demonstrates it clearly.

Gwyneth Dunwoody: Does my hon. Friend remember that the line that GNER took over was not only modernised just before then, but had the best rolling stock and facilities? Indeed, it was a good cheap buy.

Kelvin Hopkins: I thank my hon. Friend for that helpful intervention.
	As I said, I travel by train every day. I may be a bit of a trainspotter, but I listen for wheel flats—that is when the wheels make a banging noise on the track because they have not been reground. The ROSCOs—rolling stock companies—are not concerned, because it only damages the track, and they charge the cost to the public purse or the travelling passenger. Almost every train has at least one wheel flat and some have six or seven. That damages the track and the trains—but who cares, because someone else is paying?
	My final point relates to public ownership. Ministers have said that that would cost a lot of money. The reality is that have we paid out such vast sums in the past 10 years that any cost of bringing the railways back into public ownership would be miniscule by comparison. The track is effectively in public ownership already. The franchises can be handed over to a public sector organisation as and when they mature. The rolling stock is the only thing that the public would have to buy back—but they do not even have to do that, because they could negotiate a better deal with the ROSCOs and pay less, at least for the foreseeable future. So there is no problem of cost.
	The real argument is, unfortunately, political. When my right hon. Friend the Member for Tyneside, North (Mr. Byers) did the necessary and important job of getting rid of Railtrack and bringing activities into Network Rail as a stage towards public ownership, I publicly congratulated him on that. He was applauded by Labour Members, although he got great deal of flak from Conservative Members, no doubt representing the shareholding interest.
	We now know that my right hon. Friend was told by the Prime Minister that whatever he did, he was not to nationalise the railways. Unfortunately, that put on the brake. The Prime Minister is the leader of the Government and he had his say. However, I refer hon. Members to the recent report by the Transport Committee, chaired by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), which says:
	"the Government needs to keep an open mind on the provision of these services directly by the public sector."
	I ask my right hon. and hon. Friends to take note of that, and to keep an open mind on public ownership in the future. That is the way forward. Privatisation has been a disastrous failure.

John Thurso: The Bill sets out the legislation required to enact the changes to the railways and railway management consequent on the rail review in the White Paper. As the Secretary of State said, however, much can be delivered without legislation. The critical requirement is for a long-term strategy that has a clear vision of where the railways are going and how that will be delivered. In my view, that can be delivered only by Government. Consequently, the Bill's main principles are right. They are to establish clear responsibility for strategy, operation and regulation.
	Clarity is required to ensure that those responsible for delivery in the three categories have a full understanding of what is required of them and what they are responsible for, as well as to ensure value for money, both for the taxpayer and for passengers, and clear accountability from each segment. We will, therefore, support the Bill on Second Reading.
	Railways are and should be a vital part of our transport infrastructure. They can and should, however, be able to contribute more than they do. Many parts of the network are at capacity, which constrains growth and will continue to do so, yet we will look to the railways to contribute solutions to road congestion, both through carrying more passengers and more freight. Rail is therefore a national asset that deserves support and investment.
	As the Secretary of State has often stated, and reiterated this afternoon, we have reached this point because of historic circumstances: decades of under-investment by Governments of all shades over many years and a privatisation that clearly failed to live up to its prospectus. It is important to understand the past, if for no other reason than to know where we are going in future. Passengers, however, are not particularly interested in the past and apportioning blame does not improve the network. What passengers want is an efficient network, which delivers a safe, reliable and affordable rail system and allows them to get where they want to go punctually. They want a clear strategy for achieving that, and a Department for Transport that is committed to supporting the railways and producing the railway that they want. I was interested by the comment made by the hon. Member for Luton, North (Mr. Hopkins) that the Department for Transport has a reputation of not always delivering that support. I hope that, under its current leadership, it will dedicate itself to ensuring that the railways operate well and efficiently.
	Let me therefore begin with general principles. As I have said, there are three separate functions, and the first is strategy. There is a clear need for a strategy so that the public will know what is happening, when it is happening, and who is accountable for it. No one can pretend that waving a magic wand will cure all the troubles of the railways in an instant. That is simply not possible. It will be a long road to putting in the investment necessary for a modern infrastructure and delivering all the services as they should be delivered. Most passengers understand that. What they want is a strategy that sets out a route map for delivering that with clear milestones to be achieved. They want to see who is responsible for delivery in terms of operation. They want that clear strategic framework so that the operators can see what they are doing.
	It is clear to me that strategy must be the responsibility of the Government because the Government specify policy and are responsible for public expenditure. The railways will receive public support for some years to come—of that I am sure—so it is absolutely right that the Government shoulder that responsibility clearly and unambiguously.
	The second function is delivery. It seems logical that the delivery of the infrastructure should be the role of Network Rail and that it must deliver the operating plans to deliver the strategy. It is for the train operating companies to deliver the services. The way in which franchises can be developed has a role in this regard. I agree with the Secretary of State that there should be fewer franchises, which makes a great deal of sense, and I would argue that franchises should be much longer to encourage operating companies to commit to the line that they are running and invest in rolling stock.
	One of the worst aspects of privatisation was the creation of ROSCOs. The fact that they are all now owned by banks merely indicates that they must have huge money-making potential, because banks do not buy things that do not make money. I believe that that money can be better spent elsewhere in the railways. Were there longer franchises, we could put together a system that would enable those who take on the franchise to invest in rolling stock, which would be a tremendous benefit.

Alan Beith: Does my hon. Friend agree that success should be rewarded in the franchise process and that, if Great North Eastern Railway's bid to renew its successful east coast franchise were to be rejected by the Strategic Railway Authority so that it could get a bigger premium from an operator offering a lower level of service, that would destroy the logic of the franchising system?

John Thurso: My right hon. Friend makes a point that I would have made later: success should be rewarded and, where a franchise operator is clearly delivering a good service to the public, within the parameters that have been set for it, there should be a degree of presumption that such an operator will have that counting in its favour at the time of renewal.

Jeremy Corbyn: The hon. Gentleman's point about ROSCOs is well made and well put. Does he therefore agree that it would be ideal for the national rail network to own the ROSCOs and therefore the rolling stock? Clearly, it is an extraordinarily profitable area with minimal risk involved.

John Thurso: The hon. Gentleman makes an interesting point. I have not studied the matter in sufficient detail to know whether that is the right answer. Other answers might work. For example, if we consider ferries, particularly in Scotland, the franchise is relatively short, but the Scottish Executive guarantee that, where an investment in a new ship has been made, at the end of the franchise, if the franchise company loses that franchise, the asset is transferred. The Scottish Executive therefore act as a kind of banker. The point is that no third party takes a cut on the way, which, as he would agree, is the evil that needs to be addressed.
	The third function is regulation. My hon. Friends and I have long argued for a model of rail regulation more akin to that of the Civil Aviation Authority. The Bill moves in that direction and we are therefore happy to support it. We want a regulator that deals not only with financial aspects of regulation but with safety and, we would add, environmental matters.
	The Bill puts both safety and consumer representation into the remit of the Office of Rail Regulation. I agree with the inclusion of both those, but as I have just mentioned, I would like responsibility for the environmental aspects of rail also to be given to the Office of Rail Regulation. Interestingly, in France, locomotives have generally become more fuel-efficient, but that is not the case in this country. That is because neither the size of the engine, nor the amount of fuel consumed, nor the amount of fuel per passenger is taken into account in the specification of the rolling stock. A whole list of aspects come in front of those and, if we are to ensure that rail is among the transport solutions that deliver in terms of using fewer carbon fossil fuels, we must include the environmental consequences in the mix. The best way to do that would be through the Office of Rail Regulation.
	We therefore support those principles and the main thrust of the Bill, but there are considerable areas of concern in relation to the details. We look forward to working constructively with the Government in Committee in the hope that they might take on board some of those concerns.
	My first concern relates to some of the consequences of the abolition, of which I approve, of the Strategic Rail Authority with regard to the powers that go to the Secretary of State and how he will accountable for them. An allied concern relates to the powers that will go to the devolved legislatures, to London and to the passenger transport executives. It seems to me that the objective is twofold. The first aspect, as I have said, is to have a clear strategy for the railways. It therefore seems extraordinary that the Bill does not lay a specific duty on the Secretary of State to publish that strategy, and neither does it do so on the national bodies. There is a clause in the Bill saying that the national bodies, the Scottish Parliament and the Welsh Assembly, may, if they so choose, publish a strategy, but not that they must do it. It seems to me that if the objective is to have a strategy, there should be a clear duty on both the Secretary of State and the devolved Administrations to publish that strategy.
	The second objective is a clear line of accountability. The SRA failed largely because no matter what strategy it came up with, it had no way of putting it into operation; ultimately, it is the Government who have the power to do that. The Bill therefore puts strategy into the Government's hands—I hope that the strategy will be published—but there is no requirement for the Secretary of State to report to Parliament on what has happened during the year. I want him to have a duty to make an annual report, in which he comments on what he has done in the past year, on the bodies for which he is responsible and on updating the strategy. I genuinely hope that the Government will be receptive to that suggestion. It would make them more accountable for their actions and reinforce such actions, rather than diminish them.
	I certainly agree with the principle of devolving power. I have always believed that the devolution principle should be, "What can be devolved should be devolved," so it is right that the existing powers of the Scottish Parliament and of the other devolved bodies be reinforced. However, I have two specific concerns, the first of which relates to the representation of passengers. The Bill foreshadows the Rail Passengers Council moving to the Office of Rail Regulation—absolutely right, as that is the correct place for it—but it also envisages the RPC becoming one body for the entire United Kingdom. There is much in that proposal that is good and the current RPC system is fairly unwieldy, to say the least, but while the Bill devolves power to Scotland and Wales so far as responsibility for delivery to passengers is concerned, at the same time it centralises passengers' ability to make representations. That is both illogical and perverse. At the very least, the Bill needs to state how the bodies responsible for delivery—the Scottish Executive and the Welsh Assembly—will relate to passengers.
	My second concern, on which the Secretary of State briefly touched in response to an intervention, is how much money will be given to the devolved bodies. Nothing in the Bill sets out how the funding will be apportioned or how the investment will be made. I assume that the Government do not intend to cease funding the devolved bodies completely and say that everything for the rail network must come out of the existing block grants. I assume that there will be some finance, but there should be greater clarity as to what it will be.
	The money required splits into two areas: maintenance and investment. Maintenance is not a problem as it can be dealt with on a straight per mile basis, but investment is more difficult. For example, how much money will go to Scotland for new investment? One could decide to use the Barnett formula, but that clearly would not work. It is based on a per capita calculation and works out at about 7.3 per cent.; at the very least, any ratio should be based on mileage. Scotland has some 13.3 per cent. of the national railway mileage, so that factor could be taken into account.
	Alternatively, one could use a ratio based on current spend, but there is a danger in that method. The investments made in the past few years have largely centred on major English projects, particularly the west coast main line. Such a method of funding would therefore freeze in a future bias against Scotland. We need a formula that is reasonably flexible and that permits the Scottish Executive and the Welsh Assembly to know what funding they will have to introduce the improvements that they want to make. We want the Bill to ensure that improvements in the service from Edinburgh to Aberdeen or to Inverness are more likely, rather than less.
	The Secretary of State's proposal concerning the ORR makes a great deal of sense, but we want to ensure that the safety duties are properly carried out and not conflated with the functional side. Part 3 sets out the modification to the Rail Passengers Council. As I have pointed out, the general principle is fine, with the proviso that we need to consider the important issue of how to deal with the devolved Administrations.
	Perhaps my greatest worry relates to part 4, which appears to have only one purpose: to make closures and reduced services easier to implement. Why do the Government want to do that? In the light of that and of last week's announcement on community rail, there is serious concern that this could be another back-door Beeching. Beeching made some serious errors in his approach to the railways, not least in his appreciation of cost. One problem is that branch lines' costs are apportioned to them by Network Rail on an average cost basis—in the days of Beeching, they were apportioned by British Rail—but the true cost could be much less. In averaging out those costs, all the high-class, high-speed lines are included with the lower-class, lower-speed ones. It is the branch lines that tend to be the much slower, lower specification lines, and we need to ensure that a true costing of them is made, so that they are not closed in error. Beeching failed to take into account that closing branch lines removes passengers from main lines, because those who need to travel to a connecting line end up going by car, rather than taking the train.
	The role of the railways in moving freight is also important and needs to be encouraged. I was sorry to discover that, in the more recent rail targets, the previous ones have been dropped. It is important that freight move from road to rail, so I hope that when the Secretary of State's long-term vision is published, it will not only make room for freight but clearly indicate that the Government regard rail freight as a way to help combat road congestion.

Kelvin Hopkins: Does the hon. Gentleman agree that there is a real need for new lines, particularly dedicated freight lines? Such lines might ease the pressure on passenger lines and allow them to run trains at much higher speeds; indeed, they might enable the creation of dedicated passenger lines.

John Thurso: I certainly agree that new capacity is needed. The biggest challenge that the Secretary of State for Transport will face—whoever it may then be—will be the lack of capacity. Indeed, many are saying that the east coast main line will run out of capacity by approximately 2015. However, I have a slightly different solution from the hon. Gentleman's. I would take the fast trains off the existing network, put them on a dedicated high-speed line and create a fast intercity connection, particularly on the north-south route. The capacity that such a removal of high-speed trains would deliver could then be used to create more freight lines and, indeed, more passenger lines.

Alan Whitehead: Does the hon. Gentleman agree that we should also consider maximising the slots set aside for freight, which often has to compete with an increasingly overloaded passenger network in some parts of the country, through strategic methods such as upgrading lines and planning properly the interface between freight and passenger routes? Should not a key part of any strategic view of the future of rail be such an integrated view of freight and passenger travel?

John Thurso: I believe that a critical indicator on which the success of the Government's changes will be measured is whether that capacity for rail is maintained and maximised in the way that the hon. Gentleman suggested. I agree with him on that.
	I have no doubt that the railways face considerable challenges in the years ahead. Quite apart from the investment needed to catch up on decades of under-spend, new investment will be required over the years. As I said, the east coast main line is forecast by many commentators to reach capacity by 2015. We will need new solutions and other areas will have similar problems. One day, I hope that we will accept the need for a dedicated high-speed rail network.
	The Bill provides the framework in which a genuine and much needed long-term strategy can be put in place. That is why I and my hon. Friends will support it. However, it is for the Secretary of State and his Department to live up to the expectations created by the Bill. For the sake of future rail passengers, I sincerely hope that they are achieved.

Gwyneth Dunwoody: I welcome the opportunity to speak after the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) because I have always wanted to say the name of that constituency, which is such a wonderful title.
	The Bill is important, but small. If we choose to criticise certain aspects, it is not because we fail to regard it as a positive assessment of the real problems that the railway industry faces. Rather, it is because we want to tell the Government that they are doing pretty well, but ask them if they can please do a little bit better.
	It is important to understand that some of the problems arising are not new, but need a bit of new and lateral thinking. It is essential for the Government to provide very firm leadership. The Strategic Rail Authority did not provide it and in the new round of franchises, we must be quite clear about what passengers want, what efficiencies are needed and what changes are necessary.
	I hope that the Secretary of State will look closely into what is happening in the centre of the railway system around Birmingham. It is a sort of central node, yet the organisation of the services is, frankly, not working. People experience great difficulties there, but an opportunity exists now that much of the rolling stock and diesels have been freed up and are available to run longer services; from the south-west to the north-east and from the south-east to the north-west. By using those trains and providing an hourly service, we could begin to sort out some of those difficulties and provide a much higher standard of service for customers.
	When one gets beyond the day-to-day determination of what is needed for the various franchises, it becomes clear that the Railways Bill, which has some useful parts, is worrying in one or two small details. I hope that the Secretary of State will forgive me if I highlight one of them, but I will not be doing the sort of rant about local government personalities that we have heard from Conservative Front Benchers tonight. When I hear determined attempts to make Ken Livingstone into a bogeyman, I wonder whether he has some arrangement with Conservative Members, by which they give him all that free publicity and build him up in a way that, undoubtedly, he warmly welcomes. If they could tell me what the arrangement is, perhaps I could make a contribution and they could demonise me in the same way. I am sure that it would improve my chances of re-election.
	There are some real problems with the franchises. I want to comment briefly on those who are choosing to suggest, for reasons that I do not understand, that the next round of franchises will be greatly influenced by personalities and the relationship between various personalities and various political parties. Whatever one says about granting franchises and whatever one's view of companies' abilities to run the franchises that they take over, I do not think that anyone has seriously suggested that those decisions were taken on the basis of the popularity or otherwise of the management of the companies concerned.
	Yet the rumour is now gaining considerable weight within the eastern region. A case is already being built; if there are any difficulties with GNER, they will be due entirely to the fact that the Labour Government are not prepared to allow certain people to take over certain franchises. That is so bizarre. Usually, I would not bother to comment on such things, but it is important to make it clear once and for all that if we are to retain a franchise system, it will be done simply on the basis of efficiency and value for money for the taxpayer and the passenger.
	Personally, I would like to see much tougher conditions and quality of service written into the franchises. I am sure that the Secretary of State is not only alive to that possibility, but wants to ensure that it happens in the next round. We cannot allow the sort of interpretation of "flexibility of programming" whereby if an efficient and timely service cannot be run, bus substitution or some other cheaper way of providing a service is viewed as acceptable to assist the overall finances without consideration of what that means for the passengers. I am afraid that bus substitution is no substitution for an efficient and competent service.

Jeremy Corbyn: I wholly agree with my hon. Friend that bus substitution is no substitute; indeed, it often ends up driving people away from the public sector altogether. However, is she concerned about the possibility of the community rail initiative going in that direction, with the Devon and Cornwall branch lines, for example, being viewed as appropriate for bus substitution? That would be rather similar to what Beeching did for many of the Norfolk branch lines, as it resulted in fewer passengers using either bus or rail transport.

Gwyneth Dunwoody: The Secretary of State knows that the community rail partnerships are capable of producing really high-quality services. The combination of the needs of local people with the desire to provide a good railway system often improves not just the stations, services and passenger information, but even the quality of ride.
	I sincerely believe that the Secretary of State wants to develop that and I do not concur with any suggestion that it is all about some hidden attempt to cut services. I know that my right hon. Friend will not expect us to sit quietly here, should there be a move, even by default, towards such a policy. He and I both know that using taxpayers' money well means providing what taxpayers want, which is continuing community involvement in railways and continuing provision of links between smaller railway lines and the main lines. We all know what happened in the past when, for one reason or another, those lines were discontinued. I am quite convinced that the Bill is not a back-door way of cutting community services. Indeed, I hope to see them developed and improved under the Bill.
	However, I do have some concerns. I hope that the Secretary of State will make it quite clear that the  rearrangement whereby safety becomes the responsibility of the Office of Rail Regulation should not be regarded by anyone as a cost-cutting measure. It will, I hope, produce a high level of safety, and we should not assume that it will be a cheaper service to run. I think that it will, in fact, be cheaper because it will be much more efficient. By definition, that should mean not having the same overheads, but it must be made clear to the people concerned that it is not a means of spending less on safety. We are seeking a higher standard and we want to maintain it across the network because we happen to think that that is how it should be in the future.
	What will determine that will be the quality of the staff in the new office and their experience. Network Rail could undertake much of its own safety work, in the way that British Rail did, because of its particular involvements and the experience that it will build up. However, we need assurances from everyone that that particular development will not be regarded as a cheaper approach. For example, £578 million was spent on the installation of the train protection and warning system, but safety is not only a question of an immediate response to a problem, but of long-term value for money. That is essential. I also hope that the Transport and Works Act inquiry into the extension of the railway in the west midlands will be made available in due course, because it will have an impact on major lines.
	I know that my right hon. Friend the Secretary of State intends to streamline the rail passengers committees, which will be an improvement. No matter how genuine and hardworking the individual members of those committees are, the structure is unwieldy. The passengers do not know where to go to complain, there is no clear line through which to answer complaints and many hon. Members have had to undertake inquiries that would be best left to the committees. I hope that the streamlining will include the provision of a reasonable advertising budget, so that in the future no one need be unclear about where to go to obtain redress for what are real problems.
	I should have liked my right hon. Friend the Secretary of state to address the issue of rolling stock. We have already debated the untenable position of rolling stock companies or ROSCOs, which will walk away with large sums of money. Can my right hon. Friend give us an assurance that ROSCOs will be asked to contribute to retaining the rolling stock industry in the United Kingdom? That would be a source of great comfort. It is frightening that at a time when the taxpayer is at long last committing large sums to rolling stock, including improving general carriages, the work will go to overseas companies.
	The companies, sensibly, have made strong efforts to produce the responses that the Government want, but we are losing jobs in the rolling stock industry very quickly. Once the expertise is lost, it cannot be regained easily or speedily. However, we know that we will soon need more and more new contracts fulfilled, and I want to see them fulfilled in the UK.

Kelvin Hopkins: Does my hon. Friend agree that one of the problems for the rolling stock manufacturers is that they do not have stable ordering programmes? Planning is required at a national level to guarantee stable orders for a long-term future.

Gwyneth Dunwoody: I agree. Indeed, the Government should accept that we must have a research unit—including manufacturers, universities with transport departments and the industry generally—that plans new rolling stock, freight services and new provision across the board. We are investing the cash, but we are losing jobs. People in the industry have the right to expect that their expertise be not ignored or forgotten. I am sad that the Bill contains no indication of any such development in the future.
	The changes in the Bill are long overdue. The SRA, for reasons that are well known, was not working. It did not have the powers and it was not capable of translating imaginative leadership into practical results for the rail industry. We desperately need decisions to be taken now. There are worries about the removal of powers from the PTEs to sign rail franchises and the granting of franchises to those who run bus companies; those concerned regard rail and bus services as parallel and do not understand the differences between them. However, the Bill offers an opportunity to begin to bring the benighted rail industry into shape, so that passengers no longer have to demonstrate stoic resignation in the face of difficulties, but can say cheerfully that this is the first Government to commit large sums of money to the   issue, the first to show imagination about the rail industry's problems and the first to deliver the goods.

David Wilshire: The general thesis of this debate is that Britain's rail network is in a mess. That mess is of the Government's making. Even if Labour Members dispute that and claim that it owes something to privatisation, it is no justification for the Government to claim that it has nothing to do with them. The Government have had seven years to do something. To try to blame the mess on other people after all that time is total nonsense. The British railway system is in a mess and the Government have been the main architects of that.
	The Bill will make matters worse rather than better. I am content to support some items in the Bill, but overall I oppose it. As the representative of the usual channels who will sit on the Committee, and unfettered by the rules that apply to my opposite numbers, I will be able to explain in some detail why I do so.

Tom Harris: The hon. Gentleman opposes this Bill and I understand that he also opposed the previous Act. Would he have been content for the 1997 situation to continue unchanged?

David Wilshire: Of course I want to see the railways improved, but this Bill is the not the right way to go about it. If the hon. Gentleman is lucky enough to have to put up with me in Committee again, he will hear in some detail exactly why I think he is wrong and my party is right.
	The Bill is an admission by the Government of their failures. In 2000, the Government told us that they had the answer to the railways' problems—the SRA. We did not think that the SRA was a good idea, and it gives me little satisfaction to say, "We told you so." We were told that the SRA was the solution, yet—without apology from the Secretary of State—we are now told that it is the cause of the trouble. The Government have failed, but either they cannot see that or they have the brass neck not to say sorry. That is a bit much.
	The Bill also shows a failure to understand a basic truth that I like to think most people have now grasped. It is that politicians and bureaucrats are useless at running businesses. I am sorry that the hon. Member for Luton, North (Mr. Hopkins) is no longer in his place, because I listened with amazement—and a little amusement—to his contribution. It appears that dinosaurs are not extinct yet. The thrust of his argument was that nationalised businesses are good and the private sector is evil.
	I thought about that for a moment, while the hon. Gentleman began to talk a load of other nonsense, and I realised that what I had heard from the Labour Benches was an argument that vehicle makers—the makers of aircraft, cars, trams and trains—should be nationalised because they are in the private sector, that private sector road builders and road repairers should be nationalised, and that airport builders and operators should be nationalised because they apparently do not work, according to the hon. Member for Luton, North. Of course, using the same argument that only nationalised businesses are any good if they are involved in transport, he would presumably advocate the nationalisation of airlines, bus operators and taxi operators. It is nice to know that good old-fashioned, left-wing Labour flourishes.

Jeremy Corbyn: rose—

David Wilshire: Ah.

Jeremy Corbyn: My hon. Friend the Member for Luton, North (Mr. Hopkins) is not in the Chamber, but one should give credit to his argument, which I support. The railways and the buses in particular in this country would not survive but for the massive public investment in them and public support for those services. Some £10 billion invested in rail subsidies has resulted in £1 billion of profit to the private sector. Is that a good return on public money?

David Wilshire: I disagree with that argument. Just because someone puts up the money does not mean that they must own everything. I am glad to see that the hon. Member for Luton, North has returned to the Chamber. I am sorry that he missed my comments, and I am sure that he will thoroughly enjoy reading them in Hansard in the morning.
	Not only does the Bill fail to address past mistakes, but it will make at least another mistake that will make matters worse: it will give the Mayor of London more power. I take the strictures suggested by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) not to give names to those people, but the Bill will give the Mayor of London, whoever it may be—the hon. Lady might want to stand for that post one day, who knows?—more power, particularly over things outside London. I shall say why that is a huge mistake in a moment. I worry about another issue that I fear could be a mistake. Again, I shall explain it in a moment. I am worried that, rather than improving safety, the Bill might run the risk of making matters worse in some respects.
	As for the main part of the Bill—the abolition of the SRA—the Secretary of State said that things had gone wrong in the past, but he could not bring himself to say that the SRA was a disaster. It was a good thing—so good that he wants to abolish it. When I intervened on him about that, he accused me of not understanding the reasoned amendment tabled by the Conservative party. Despite the fact that the Secretary of State said that the reasoned amendment says that we want to keep the SRA, try as I might— reading and re-reading it—I have failed to find the words "We want to keep the SRA." The Secretary of State was wrong in attributing something to the reasoned amendment that simply is not there. All we say in respect of the SRA is that, in abolishing it, the Government are giving powers to politicians and bureaucrats. That is what we are against in relation to the SRA, as our reasoned amendment makes clear.
	The SRA was not only ineffective, but a waste of money. Let us simply look at the facts of the matter. The Office of Passenger Rail Franchising cost the British taxpayer £13 million and employed 187 staff in 2000–01—its last year in existence before its replacement by the SRA. We are now asked to abolish its replacement, which costs the British taxpayer £102 million and employs 454 people. Not only was the SRA a failure, but it was a waste of time and money too.
	I am only too pleased to support the abolition of the SRA in principle—to that extent, I support what the Government propose in the Bill—but I am not happy to pass the responsibility upwards to politicians and bureaucrats. I want the responsibilities and work passed downwards to where they can really make a difference—to the travelling public.

Kelvin Hopkins: I am following what the hon. Gentleman says; but in effect, this noble House keeps being maligned. Ultimate accountability will be closer to the House, so we will have some say in the costs and the running of the railways. We do not have that say now.

David Wilshire: One must distinguish the input of taxpayers' money from the operation of the service. I do not understand what is gained by passing responsibility and accountability for what the passengers must endure to the House. I accept that the hon. Gentleman is a regular passenger, but he has an input to make not in his capacity as the Member for Luton, North, but as a regular user of train services. The real accountability for the railways ought to lie with the people who depend on them and use them, not with politicians, because our record—I almost said track record, but I ask the House to forgive that sort of pun—in these matters is not something that we can be proud of.
	The issue of the SRA, politicians and bureaucrats is not the only thing that concerns me; I am also concerned about giving more responsibilities to Network Rail—that wonderful, unaccountable organisation. We are not quite sure what it is, who is in it or how it is established, but the one thing that it is not is accountable to anyone. The White Paper made a fair point when it said that the franchise operators tended to try to pass the buck and that, somehow or other, they could wriggle around their responsibilities by pointing the finger at Network Rail.
	What is the wondrous solution that the Government come up with? They want to make it easier for the franchise operators to say, "Nothing to do with me, guv." As we go through the Bill, we discover that Network Rail will be responsible for the performance of the railways. The people who operate the trains should be responsible for that. The Government will make Network Rail responsible for planning. Again, the people who operate the railways should be responsible for that.
	Worst of all, the Government will make Network Rail responsible for the timetables. I find that quite extraordinary. If a train does not arrive or something is changed, my constituents rightly complain to South West Trains, asking, "What do you think you're playing at?" In the future, South West Trains and the other companies will say, "Nothing to do with us. This is what we were told to do." That is the exact opposite of making the franchise operators more accountable. Network Rail's job is to hold the operators to account, not to take the responsibility itself. When responsibility is removed, those involved become irresponsible.

Tom Harris: On a point of information, the hon. Gentleman may well be right, but I understand that the SRA, not the train operators, sets the timetables. In fact, the situation for the train companies will remain the same when the Bill is enacted.

David Wilshire: The arrangements are all very vague at the moment. If I understand the White Paper correctly, the responsibility is split, but no one is quite sure. The allegation in the White Paper is that it is possible to pass the buck. To stop that happening in future, everything will lie with this wonderful thing called Network Rail.
	The Secretary of State told us in magisterial terms—if I noted this down correctly—that only the Government can handle strategy. I think that he said that twice. That was his great assertion. Let us give a little thought to the Secretary of State's performance in respect of the strategic handling of the railways. My hon. Friend the Member for South Suffolk (Mr. Yeo), who opened the debate for the Conservative party, mentioned the Gatwick Express. The strategic thinking about the future of the Gatwick Express involves getting commuters to use it, making life more difficult for air travellers, thus driving the people who use Gatwick back on to the roads. Is it joined-up thinking and an integrated transport policy to attack a success, turn it into something else and undermine the principles in the aviation White Paper? That is really "strategic".

Alan Whitehead: I have listened carefully to the hon. Gentleman's alternative theory of how one moves towards a strategic view of the railways. Will he explain how, for example, one might increase and enhance freight capacity on the railways? Would that strategic responsibility lie in the hands of the freight companies or the passenger companies, or perhaps with the travelling public?

David Wilshire: I am sure that my opposite number in the usual channels will have listened with some care to that intervention and spotted another volunteer to sit on the Committee and listen to me explaining at some length the answers to precisely those questions. I am having difficulty finding people for the Standing Committee, but it appears that my contribution is helping to produce Labour Members who are willing to serve and hear my pearls of wisdom.

George Howarth: Will the hon. Gentleman give way?

David Wilshire: Ah, here is another one.

George Howarth: Will the hon. Gentleman reflect on the fact that, as we listen to his speech, those of us who wish to serve on the Committee become less likely by the minute to do so?

David Wilshire: You ain't heard nothin' yet, is my response to that.
	The lack of joined-up strategic thinking by the Government does not end with the Gatwick Express. It has taken some effort to beat off the stupid idea that the Heathrow Express should be turned into part of Crossrail and made to stop here, there and everywhere. Not only do the Government want to undermine Gatwick's success, but they want to undermine Heathrow's as well and put at risk a large number of jobs in my constituency.

Jeremy Corbyn: Will the hon. Gentleman reflect on the fact that the Heathrow Express is the world's most expensive railway, bar none, to travel on? Would he not be better employed in endeavouring to bring its prices more into line with those on other train services that operate along almost the same piece of track, apart from the short distance into Heathrow airport itself?

David Wilshire: The cost of the Heathrow Express is a separate issue from the attempt to prevent it fulfilling its function, which is providing a service to Heathrow for passengers. I hear the hon. Gentleman's comment about the cost—I, too, have reservations in that respect—but the cost has nothing to do with trying to close it and turn it into part of Crossrail.
	It is not only with the Heathrow Express that the Government's joined-up thinking comes adrift. Consider the attempts to build Airtrack at Heathrow. The Government produce an aviation White Paper that states that Heathrow has a role to play in the future of air transport in this country, but it can develop only if surface access is via public transport, not by road. However, we encounter attempts to stop the Heathrow Express, which is part of that strategic policy, and obstacles in the way of building Airtrack, which is a route from Heathrow into my constituency and thence to Waterloo or Victoria. That has happened because the Government choose a priority—commuters—and do not think through the implications for something just as important, namely, the successful continuation of British aviation. That does not make sense.
	The position worsens when we examine the Bill's provisions for London. All the rail services into my constituency and all the stations in my constituency are targets for Transport for London—its representatives told me so in a meeting on 19 October and made their desire to take over all of that crystal clear. When I asked them what they meant by taking over, they told me that TFL wanted to organise the timetables: never mind my constituents, it would be done for the convenience of London. They said TFL wanted to control fares: never mind what rail travel ought to cost my constituents, fares would be decided according to what is good for London. They told me that TFL would be responsible for improvements made to train services in its greatly expanded empire. That worried me, because I saw whathappened to the buses in London—the huge expenditure and losses, and fares jacked up to pay for them. I realised that my constituents were in danger of having their rail fares increased to pay for—who knows what? Almost certainly not rail services in Spelthorne.
	South West Trains has a programme of improving stations and platforms in my constituency and others outside London. I have no confidence, unless the Bill is amended, that money taken from commuters living in my constituency will not be squandered elsewhere in London for some politically correct programme that Transport for London prefers to helping my constituents. I cannot help wondering whether the plan goes further than the Bill admits. The Mayor of London has an undisguised desire to grab areas surrounding London and make his empire even bigger and he has made it crystal clear that my constituency is one of his prime targets. Perhaps he thinks that if he gets control of my rail services, he will be able to argue that Spelthorne ought to be part of London, after all.
	The Bill suggests that we can overcome the problem of taking representations from people who do not live and therefore do not vote in Greater London by having two members of the board of TFL from outside the capital. I thought that, in principle, that might work, but then I looked at the details, and what did I find? The Mayor has to consult the regional assembly—that discredited body that no one in the south-east wants. What do people on the Isle of Wight have to contribute to a discussion about what is best for rail services in my constituency and Heathrow? Nothing. Surely consultation ought to be with those who will be affected by the change. Another thing I have discovered about the arrangement to try to buy us off and keep us quiet is a restriction that only two members of the board of TFL can be elected members of a principal council.

Greg Knight: My hon. Friend is making a powerful point. Is it not possible to engage in consultation, then totally ignore the views expressed therein? Is that not likely to happen in the situation that he is describing?

David Wilshire: That is precisely what the Department for Transport seems to specialise in doing. It consulted on dualling the A303 in south Somerset down into Devon, and the proposal commanded widespread support from local councils, which thought it was precisely the right thing to do, but the Department ignored their views—a wonderful arrangement.
	As I was saying, only two members of the board of Transport for London may be councillors. I have not discovered what the present membership of the board is, but let us suppose that there are two elected members on it. Even if people outside London are given some sort of representation on the board, therefore, they will be barred by statute from being represented by persons who have a democratic mandate to speak on their behalf. That is not democracy. It is a sop to try to keep us quiet—but we have spotted it.
	I mentioned my concern about safety—an issue that I raise with some trepidation. I know that one of the responses is that the proposed arrangement is modelled on the air accidents investigation branch and on the Civil Aviation Authority's system, about which I know a fair bit and which seems to work. However, I have always had some reservations both about the CAA's safety arrangements and the AAIB. I note that as well as being responsible for safety, the Office of Rail Regulation is responsible for performance and costs. I would not mind if it was only responsible for safety—we could have a discussion about that. However, trying to improve performance and keep costs down often produces pressure to cut corners, and if an organisation that is responsible for safety faces that pressure to cut corners, I worry. I am sure that my concern can be laid to rest and that the Government can deal with the issue, but I believe that, as the Bill stands, there is a risk to the safety of rail passengers.
	The hon. Member for Crewe and Nantwich said that it might be cheaper to transfer functions carried out by the Health and Safety Executive to an existing body. I accept that argument, and understand why some people say that the CAA carries out such a role for air travel. However, there is a fundamental difference between air travel and surface transport. Everything that happens in the air can easily be brought within the ambit of aviation, so a single-issue approach is appropriate. However, on the ground, railways and roads are both involved, so people would ask whether something was wholly a railway matter, it partly a railway matter or something else. There is a danger of duplication, so perhaps we should consider making surface accidents the responsibility of a single organisation. Although I am concerned about those issues, I am not prepared to assert that I am right. I hope, however, that the Government are prepared to address them.
	The Bill represents yet another missed opportunity by the Government, who are merely moving deckchairs around the Titanic. The White Paper said that the railways should be "more customer-focused" and "more passenger-friendly." The Bill, however, does the exact opposite. It marginalises people who work with customers and weakens passenger input, substituting remote national politicians and the unaccountable Network Rail. It is, as I said at the beginning of my speech, an admission of the Government's failure, and it will make matters worse, not better.

Graham Stringer: To reassure the hon. Member for Spelthorne (Mr. Wilshire), I can tell him that the railways were in charge of their own safety for many years before that responsibility was handed over to the Health and Safety Executive. There has been a century of improvement in railway safety, so although the hon. Gentleman made some interesting points, we do not need to worry about them.
	Our debate has lacked annoyance, perhaps even anger, at what has happened to our railways in the 11 years since the Railways Act 1993. To try to gain some perspective, I looked at the Second Reading of the Bill that set up the Strategic Rail Authority in July 1999. Fascinatingly, in that debate, Opposition Members were completely satisfied with privatisation. I am caricaturing, of course, but the essence of their argument was that nationalisation of the railways had never worked and never would, thus justifying the extremely high costs incurred in selling the railways to Railtrack. Interestingly, in 1999 the railways were valued at six times the price at which they were sold off—the Public Accounts Committee concluded that the railways had been undervalued and sold in haste.

George Young: Does the hon. Gentleman think that by any chance the attitude that the Labour party took at the time of privatisation had some influence on the price?

Graham Stringer: The major influence on the price was the deep underlying philosophy of the Conservative party that it had to do something to get the problem off its hands. On the other side of the equation, ROSCOs—rolling stock companies—were sold off in an unregulated way and were sold on almost immediately for a third more.
	That was the situation that we faced, but it became a great deal worse. Labour Members were keen that the SRA should provide a sensible direction for the disparate rail industry, which, admittedly, was giving a good financial performance. The hon. Member for Rochford and Southend, East (Sir Teddy Taylor), for example, said on Second Reading of the Railways Bill in 1999 that eventually the railways would be operated without any cost to the public sector. Even though he was right according to his own terms of reference, events proved him wrong.
	Railtrack was not a railway company, so it was not controlled. It turned into a rapacious property development company that paid scant regard to the safety of travellers and passengers. "Broken Rails" by Christian Wolmar sets out in great detail the way in which privatisation of the railways and the establishment of Railtrack led to poor railway maintenance. The chief executive of Railtrack got off extremely lightly. Hon. Members may not know that before the accident at Paddington he claimed that the station was the safest in the world. That was mere bravado, and he was not interested in the problems. Subcontractors to Railtrack and smaller groups were operating at a large profit without any direct control, so it was clear that the chief executive had no idea what was going on.
	Railtrack has now been replaced by Network Rail, and there is a huge subsidy for the railways. It is difficult to know from the figures what is investment and what is subsidy, but the Government have made two attempts prior to the introduction of the present Railways Bill to put things right. I have already talked about Network Rail—[Interruption.] Opposition Members may laugh, but I do not think that the Government got it right at the time, and I do not wish to defend everything that they did. They acted to provide a sensible direction for a disparate industry, which was beginning to show the cracks.
	It is clear, however, that the overlap between the responsibilities of the SRA and the rail regulator were not properly thought through. In its report on the future of the railways, the Transport Committee said that the rail regulator could effectively overrule the SRA, the Secretary of State for Transport and the Treasury and decide how much money went into the railways. I do not believe that that situation was envisaged by the then Secretary of State in 1999; it was a mistake that led to the spending of a great deal of public money, not all of it on investment.
	The Government made another attempt to put things right when they created Network Rail after Railtrack had failed both as a property company and in its fundamental duty of running the railways. Network Rail is an improvement, but it is an odd body, and it is difficult to know whether it is in the public or the private sector. It cannot continue in its present form for long, because there is clearly no direct accountability for the money that is spent, either to shareholders or to the Government. It is run by people with vested interests in the railway system. It may work better than Railtrack did, because those people have the interests of the railways at heart, but it will not work in the medium term.
	I am disappointed that the Bill does not provide for an improvement in the structure of Network Rail. I see the Bill as a step forward, and in the right direction, but I do not believe that Network Rail is the right medium or long-term solution for the railways. We do not know how taxpayers' money is being spent in the rail system. Network Rail is a vehicle for keeping £100 billion worth of debt off the public accounts. Everybody knows that, and it does not seem sensible to keep an unsatisfactory structure in place to hide something that everybody has seen. That is not a long-term solution.
	On the amount of extra money that has been spent and attempts to disaggregate it, Professor Roderick Smith told the Transport Committee that for between £11 billion and £27 billion—the amount of money wasted in the rail system is probably within that range of expenditure—we could have had a new rail system. That is the extraordinary sum that has been wasted.
	I support the Bill, and I will vote for it on Second Reading, because it addresses some of the problems in the rail system. Primarily it addresses the need for public accountability for money. The hon. Member for South Suffolk (Mr. Yeo) did not tell us how the large amounts of public money that have been put into the rail system should be accounted for. I believe that there should be accountability for taxpayers' money, and the Bill makes the Secretary of State accountable. That does not mean that the Secretary of State will control the entire railway system. Many of those responsibilities will remain within the rail regulatory system and within Network Rail, but the Secretary of State will take responsibility for the public money and some of the major strategies involved.
	There are three aspects of the Bill, to which I shall speak briefly. I mentioned the first in response to the contribution from the hon. Member for Spelthorne—the removal of responsibility for health and safety in the rail system from the Health and Safety Executive. I fully support that decision. It is clearly a brave decision for a Secretary of State to take, because if there is an accident—and there can be an accident in any system— people will tend to point the finger at him. That would be the wrong conclusion to come to. It is clear from the evidence to the Select Committee of Mr. Osborne, who for a period was in charge of safety at the HSE, occupying the position recommended by the Cullen inquiry, that the rail industry had lost confidence in the HSE to pursue safety in the rail industry.
	The Select Committee also found many cases of gold-plating—public money spent on minor safety improvements. The money would have been much better spent elsewhere within the transport system. Spending £1 billion in one place to achieve very little improvement in safety means that £1 billion less is being spent elsewhere—for example, on the roads, where 3,000 people a year are killed. I am pleased with the change, and I would hate to see it misrepresented. I was a great supporter of the Health and Safety at Work, etc. Act 1974 when it was introduced—

Greg Knight: The official Opposition broadly agree with the points that the hon. Gentleman is making about the Health and Safety Executive. Subject to hearing what the Minister has to say further in Committee, we think that the decision is broadly the right one.

Graham Stringer: I am grateful to the right hon. Gentleman. I am not sure that it is always career-enhancing to have Opposition Members agreeing with me, but I thank him for that intervention.
	The other two aspects on which I shall comment are, first, rail substitution, and then the right of passenger transport executives to sign franchises. On rail-bus substitution, there is an implication in the Bill of a one-way ratchet. If the PTEs are willing to take the money currently applied to rail lines and put it into bus services, as a reward for transferring that money they will be allowed to regulate those buses. In some cases that might be sensible. In some urban areas there are probably a very few railway lines that do not have a future use. None the less, I ask the Secretary of State why, if a failing railway line triggers bus regulation, bus regulation is not triggered by failing bus services, such as those in north Manchester, and other major cities and metropolitan areas? It does not make sense to say that if a railway fails the PTE can regulate the buses, but if buses fail, there is no competition and the bus companies rip off the public sector with cartels, the PTE cannot undertake regulation.
	There is a further point about rail-bus substitution. Regulation and quality contracts will be allowed if the Secretary of State agrees and they are within the terms of the local transport plan. The local transport plans have been given four objectives by Government—to reduce congestion, improve road safety, improve accessibility and reduce pollution. Nobody could disagree with those aims, but having served on a passenger transport authority and on a city council for a long time, I know that those are not the only objectives of public transport systems. They are good objectives, but two related objectives that should be recognised are getting more people into city centres and something that is probably even more important—supporting urban regeneration schemes.
	There are some urban regeneration schemes in Greater Manchester that will not happen if there are only bus services. They need light rail and in some cases heavy rail, or light rail substitution for heavy rail. The Government are too narrow in their objectives for local transport plans if that is the basis on which they allow the substitution of heavy rail for buses. When I asked the Secretary of State about that in the Transport Committee, he said that it was very difficult to measure urban regeneration. Indeed it is.
	It is very difficult to measure congestion. The Department for Transport and the Secretary of State have failed for some years to come up with a universally agreed measure of congestion. I ask the Secretary of State a simple question: is Leeds more congested than   Manchester? Is Leeds more congested than Birmingham? Is Birmingham more congested than Manchester? If there were a simple measure, there would be a simple answer. The degree of difficulty in measuring something does not mean that it should not be measured. For most councils and most passenger transport authorities, one of their top priorities would be urban regeneration.
	The issue of the passenger transport executives' right to sign franchises has been touched on by other speakers. I have said on a number of occasions that I agree with the Government's declared intention to devolve responsibilities to the passenger transport executives, and I listened carefully to what the Secretary of State said in response to a number of interventions on that subject. To summarise, he said that there had been at least one difficulty when a PTE had used a delay in signing to haggle for extra resources. Surely he could take to himself the power to intervene if PTEs unreasonably withheld the signature; I do not seen any problem with that.
	It was also suggested that it would be simpler if the Secretary of State took control and effectively devolved responsibility back to the PTEs, allowing them to sign franchises if he agreed. I think that that is a complicating factor, as PTEs and members of PTAs are much more likely to end up spending a lot of time negotiating with Whitehall officials, who will almost inevitably not understand the circumstances in Manchester, Birmingham, Leeds, Newcastle or elsewhere. That arrangement will be more time-consuming than allowing PTEs to do what, with only one exception, they have done successfully and without any problems.
	I welcome the fact that the Secretary of State told the Select Committee that on that matter he would consider representations, and what was said in the Standing Committee. He also said today that he would meet a delegation from the House of Commons passenger transport executive group, which has recently been set up. I hope to persuade him in those discussions that the current proposals are centralising ones that conflict with the objectives set out in the White Paper, with which I agree.
	I support the Bill as a step forward and a way of ensuring more accountability for public money. It does not go as far as I would like, it leaves some odd structures in the railway industry that are probably not as effective as they could be and will not deliver as well as they should, and there are some detailed parts of it that I look forward to discussing in Committee.

Richard Younger-Ross: I wish to start with an apology, as I will shortly be chairing a meeting that I have organised and must leave the Chamber immediately after my speech. No disrespect is intended.
	It is a matter of only a few weeks since the tragic rail disaster at Ufton near Newbury. My constituent, Emily Webster, a schoolgirl, was sadly one of the five who died. I have since had conversations with her family and her father, and they are all concerned about rail safety. Her father in particular has raised the issue of seat belts in trains, which I shall come to later. The Bill transfers health and safety responsibilities to the Office of Rail Regulation and the question that we must ask now and on which we have to test the Government in Committee is whether that will improve rail safety.
	My hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) likened what is proposed to a Civil Aviation Authority approach. The one thing about the CAA is that it responds and carries out its inquiries quickly and looks into what needs to be remedied, after which the air industry does its repairs promptly. One aspect of the rail inquiries that we have had in the past is that they have taken a long time. Recommendations made in other inquiries are often not fully taken up and are sometimes not implemented. It is all very well to say that rail travel is a safe mode of transport. Yes, it is—it is far safer than flying or driving—but that is no excuse for saying that we should not improve standards even further.
	I had a conversation earlier with my hon. Friend the Member for Newbury (Mr. Rendel), two of whose constituents tragically died. He cannot be present because of previous commitments, but he raised a number of safety issues relating to the Ufton disaster. It appears that the emergency hammers that are used to break the glass broke before the glass did, so the windows could not be knocked out. Perhaps people were hitting the windows in the wrong place, but could not see the emergency signs. He asked whether there should be additional emergency lighting.
	It appears that the points near the crossing may have added to the disaster. If that is the case, it is a safety issue that needs to be explored further. Perhaps all crossings near points need to be looked at in detail to see whether it is possible to ensure that a chain of events that was perhaps a freak, but a tragedy none the less, cannot be repeated.
	Another point that my hon. Friend made was about people leaving the accident scene without their names having been taken. That may cause problems in relation to post-traumatic shock, but evidence is a problem. We have referred to the noises that passengers hear, perhaps from the rails, but it is a problem if they cannot be contacted to find out whether they have any evidence. I hope that the new safety mechanisms will ensure that such details are not only looked at, but acted on, as I am sure they would be in many other areas.
	I come now to the concern of Peter Webster, who has raised the issue of seat belts. I often use a term used by John F. Kennedy:
	"ask not what your country can do for you—ask what you can do for your country."
	It is not a matter of whether we should have seat belts, but a case of why we should not have them. Seat belts demonstrably improve safety in the air and on cars. Common sense says that, if somebody is in a moving vehicle that comes to a halt very abruptly at high speed and turns over, a seat belt will aid their chances of survival and reduce any injuries that they receive.
	The Finnish transport authority is often quoted as saying in part that such a proposal could not be recommended, largely on the ground that people would not wear seat belts. Passengers felt that there should be seat belts, however, and the authority felt that they would reduce the number of injuries and deaths. Peter Webster has done his own research on a train. He spoke to a large number of passengers and gave them a quick survey to fill out. He found that the vast majority were in favour of seat belts on trains. When it came to children, the vast majority of passengers said that although they might not wear belts themselves, they would insist that their children did so. That may have saved Emily's life. We do not know.

John Bercow: I respect the sincerity of the hon. Gentleman's argument, but I would take a great deal of persuading about the merits of installing seat belts, which it would presumably be compulsory to wear. However, may I put to him this prosaic but serious question: what about those on trains who are standing?

Richard Younger-Ross: I take the point. I think that I recall that the number of people standing on the train was a contributory factor to the injuries sustained in the Clapham rail disaster and that the injuries in the Paddington rail disaster were compounded by passengers standing up and moving through first class to the front of the train, as the train came into the station. Standing passengers on a train are at risk. People do not spend a lot of time standing on trains—if seats are available, they may go to and from the buffet car. Peter Webster researched how long people spend out of their seats, and, by and large, people on long journeys spend only a few minutes out of their seats.
	Some trains are overcrowded. In my constituency, some people are left on the platform because the trains are too full, which is unacceptable. In the transition to full privatisation, the overcrowding on trains in my constituency led to the rail company putting up fares to try to relieve congestion. In that case, the rail company doubled school fares because the trains were too crowded. It did not put on extra carriages and tried to force people off the trains to reduce overcrowding. We need investment in the rail service to increase the number of seats on trains and to reduce the chance of people standing.
	Seat belts on trains need not be compulsory—the hon. Member for Buckingham (Mr. Bercow) referred to that issue, which is not the point—but they should be optional and they should be there to give passengers the chance to affect their lives and those of their families. That does not cover all eventualities, and I do not say that it does. On an aeroplane, one is not compelled to wear a seat belt all the time, but one is compelled to wear one on take-off, landing and when the pilot says so. Vacuums occur, and people have been injured in accidents because planes have suddenly lost height. One cannot take account of such events, although I am not saying that one should take account of all eventualities, because we would wrap everything in cotton wool if we did so.
	In my view, the provision of seat belts would certainly aid safety at a cost that would not be considerable. A company has contacted the rail companies and offered to fit out carriages on a trial basis. Why not? Rail companies should fit out a carriage or two to measure use and passengers' responses. Having done that, they might say, "No one uses seat belts. They are a waste of money," which might be a valid argument in those circumstances. Until someone does that, however, they cannot argue that point.
	Finally, I shall comment on some other issues. The accident at Ufton involved a car on a crossing in which a train hit the car and derailed. Crossings are seen as a problem for the rail operator, but I should like to ask why, because the Bill does not address that point. A crossing is an interconnection between road and rail. If improvements to the crossing are needed for rail safety, they are also needed for road safety. Whether the matter involves a trunk road or a county or other local authority road, the road authority should logically bear part of the cost of improvements, which might involve constructing a bridge.
	The road authorities often pressurise Railtrack on gate-closure times, which is one of the reasons why indicators on crossings may not work—the train stopping time may be greater than the time that the gate is shut for traffic. If the length of time that a gate is down is a traffic concern and if a congestion problem relates to that period of time, the road authorities should perhaps deal with the situation by constructing an underpass or bridge.
	If one constructs a bridge or alters access, one requires planning consent. One of the Bill's oddities is that rail authorities have permitted development rights: they can put up mobile phone masts for their own use along the track and do a lot of other work without planning consent. On planning, Network Rail and the rail operators should be accountable for all that they do. They may not need full planning consent, but they should be accountable, which does not mean the limited accountability to which they are subject at the moment.
	The Bill touches on finance. My background is in architecture. One can examine the costs of running an organisation in terms of whole-life costs or on a cash-flow basis. One of the problems with rail privatisation is that it considered the rail companies in terms of cash flow rather than in terms of whole-life costs. When we examine the costs and how we fund the railways and discuss budgets with the Chancellor of the Exchequer, we should do so not only in terms of today's budget, but in total and in the round. If one always worked on cash flow, total costs would exceed the costs if one had built in maintenance costs from the beginning. The road network is a classic example: if a county council cuts its maintenance programme to save money, the structure of the road is eventually damaged, which means that structural repairs are required.
	Bypass loops past stations such as Newton Abbott and opening up platforms to improve capacity would improve the Waterloo rail line. Creating an alternative route to Cornwall for whenever Virgin Trains get stuck at Dawlish because water is on the line or because a storm has damaged the sea wall is vital for the Cornish economy. Whenever the Tamar bridge is closed for repairs, it affects districts and towns further down the line.
	Thank you, Madam Deputy Speaker, for the opportunity to contribute to today's debate. I ask members of the Committee to examine and test improvements to health and safety, and the measures that I have described will work to that end.

George Howarth: In view of the source behind the observations of the hon. Member for Teignbridge (Richard Younger-Ross), I am sure that they will be listened to seriously. The points that he raised, particularly in relation to the sad accident that involved one of his constituents, will be taken seriously.
	I originally intended to speak on local matters. Having listened to the hon. Members for South Suffolk (Mr. Yeo) and for Spelthorne (Mr. Wilshire), however, neither of whom is currently in his seat, I think it is appropriate to make some observations about the argument between the Opposition and the Government. Those speeches were similar and addressed the same issues. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) commented earlier on Conservative Members' antipathy towards the Mayor of London. We all have our own opinions about the present incumbent, but Conservative Members have overreacted in basing a large part of their opposition to the Bill on their fears about what the Mayor of London might do.
	The role of central Government is the second issue that divides us. The hon. Member for Spelthorne put it more robustly, but the hon. Member for South Suffolk made the same argument; the more the Government are out of the railroads, the better the railroads will be. That argument may or may not be true, although I reject it, but the question is this: who created the problem in the first place? It was not this Government; they did not allow many years of underinvestment in the railway system or create a botched privatisation system, the consequences of which we are still trying to recover from.
	I have to say to Opposition Members, in a spirit of great friendship, that if they intend to sustain their opposition to the Bill through Standing Committee and beyond, they will need to find a better set of arguments, because on the basis of what they have said today, they simply do not have any. It is opposition for opposition's sake.
	The Government, rightly, wish to ensure that we get for value for money in our expenditure and that what is spent is invested wisely in the network. My interest in the Bill relates particularly to the Merseyrail electrics network, a unique system in the United Kingdom. It is local, segregated and electrified, and constitutes a regional metro system.
	In July 2003, Merseytravel—the passenger transport executive for Merseyside—and the passenger transport authority took over responsibility from the Strategic Rail Authority for letting and managing the contract to provide passenger services on the Merseyrail electrics network. I should say a few words about Merseytravel, particularly its chief executive and director general and its chair. My hon. Friend the Minister, who is preoccupied elsewhere in the Chamber, knows very well Neil Scales, the chief executive and director general of that esteemed body, and is also very familiar with the work of Councillor Mark Dowd, who is its chair.

John Bercow: He is now searching for inspiration elsewhere.

George Howarth: Councillor Dowd does not need to seek inspiration from anywhere; he is a very inspired politician.
	The Government had enough confidence in those involved to let them have this unique arrangement. They have proved in many ways how capable they are, and it is a tribute to them and to the authority that the Government allowed them to go ahead on that basis. Merseytravel accordingly awarded a 25-year contract toMerseyrail Services Holding Company Ltd.—Merseyrail—which is a joint venture between Serco, NedRailways and Merseyrail itself. That marked a new era in the provision of local rail services on Merseyside through the creation of a long-term and genuinely locally controlled public-private partnership between the public transport authority and the train operating company. The confidence that the Government showed in Merseytravel and Merseyrail has proved well merited.
	Since these new arrangements have been in place, performance on the network has been transformed. It is currently operating at more than 94 per cent. PPM, which, I am reliably informed, stands for passenger performance monitoring; whatever it is, we have achieved 94 per cent. of it. Punctuality and reliability are at record levels and, according to the latest Strategic Rail Authority figures, Merseyrail is the best performing train-operating company on the UK mainland. Next January's fare rises are one of the lowest in the UK mainland and are pegged to the level of inflation.

John Pugh: Before the hon. Gentleman goes too far in his praise of Councillor Dowd, may I point out that when I last went back from London on Thursday the train broke down on me?

George Howarth: I hesitate to say that Councillor Dowd might have been aware of who was travelling on it; I am sure that that was not the case. Every system has its failures, and it is unfortunate that the hon. Gentleman was caught up in one of those. Nevertheless, the fact remains that it is the best-performing train service in the UK, and I am sure that he is as proud of it as I am.
	The experience of the Merseyrail electrics network demonstrates the benefits of enabling local people to deliver local solutions to local issues. That is entirely consistent with the objectives set out in the White Paper. Full local decision making will place overall responsibility for the railway infrastructure, alongside overall responsibility for passenger services, in the hands of Merseytravel. That transfer will ensure that this unique local railway is locally controlled and can deliver further improvements to the community on Merseyside that uses it. The people of Merseyside will therefore benefit from local people taking local decisions for long-term and day-to-day management of the entire segregated network. Merseytravel will ensure that local solutions to local problems are provided quickly and properly; indeed, it has a long track record of doing just that. The result will be a more efficient service to passengers with greater accountability and responsibility, as well as reduced operating costs.
	Although the transfer is technically possible under the existing legislation—indeed, it took place—it would be prudent for the Government to include in the Bill a reserve power to ensure that Ministers can be satisfied that all railway infrastructure is managed as efficiently and effectively as possible.
	I commend the Bill and hope to return to some of the issues if I am fortunate enough to serve on the Standing Committee.

Robert Syms: We have had a fairly wide-ranging debate, which is not surprising given that we are talking about changing structures in the industry.
	The hon. Member for Teignbridge (Richard Younger-Ross) argued for seat belts in trains. He has a case, and it should be investigated. However, all the research and evidence shows that seat belts work well in cars because they are attached to the frame of a vehicle, which provides their strength. That is less applicable to coaches, because seat belts tend to be attached to the seats, and someone involved in an accident can find themselves attached to a seat that is itself moving. I suspect that there may be a similar problem in trains. Moreover, as my hon. Friend the Member for Buckingham (Mr. Bercow) observed, in a train many people will be standing. Last time I went on the train between London and Reading well over 100 people were standing until Reading, when they started to thin out a bit. In that situation, one is likely to be hit by a flying passenger or an object such as a bicycle, so there are wider issues beyond seat belts to be considered.
	When my hon. Friend the Member for Tunbridge Wells (Mr. Norman) was shadow Secretary of State for Environment, Transport and the Regions in the last Parliament, he thought that the issue of passengers standing should be dealt with, and suggested for starters that they should not have to pay a fare as they had not got a seat. If one does not get a seat on an aircraft, one does not travel, but on the railways one pays the full cost and has to stand in the aisles. Many people greeted his suggestion with horror. Nevertheless, we must consider the wider issues of people standing and of bags in corridors. Some trains are so crowded, partly because of the success of privatisation, that getting out of them can take a while even in normal conditions, let alone in an emergency or an accident.

John Bercow: Does my hon. Friend accept that although the hon. Member for Teignbridge gave a thoughtful answer to my question, it raised a problem, for did not he suggest that either far more seats should be provided, which would be an extremely expensive and long-term enterprise for any Government, or all carriages should be all-seater in the interim in any case, which would serve only to exacerbate passenger frustration and the length of the delays that people experience?

Robert Syms: The hon. Member for Teignbridge made a thoughtful contribution that doubtless reflected the genuine concerns of his constituents. However, his questions raised even more questions about the way in which we manage the railway and whether there should be more seats or more cars added to trains. Nevertheless, I am sure that the Minister heard his comments and will consult his civil servants about what can be done.
	We tend to concentrate on first principles and I am sure that a few unreconstructed Members would like to revert to the nationalised rail structure. The railways in Britain were a great private sector success. We have heard much about fortunes made and lost and that certainly happened in the mid-Victorian era. The private sector ran the railways for 100 years before it was decided to take them into public ownership. Apart from the ideological concerns of the then Labour Government, it happened because the railways played a major part in our economy in the second world war. They were heavily used and needed massive investment, and it was believed that the public sector would be better able to provide the investment for them to grow in the post-war years.
	As many hon. Members, including the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), said, decades of under-investment under British Rail caused the railways' problems. However, if one considers the matter, it is inevitable that a publicly owned railway system, in which the investments are measured against education, health, foreign aid and everything else in the public sector, will be affected by investment rationing. I remember talking to a Minister in the first Thatcher Government of 1979 who worked at the Department of Transport. That person said that, when the Government came to office, any capital investment in British Rail of more than £250,000 had to be referred to the Secretary of State. That was 25 years ago and £250,000 would be some millions today. Nevertheless, that was essentially the cost of a station refurbishment and it had to be referred to the political masters. No railway can run in the long term if politicians deal with that amount of detail.

Tom Harris: I am sure that the hon. Gentleman knows that the Bill explicitly provides that proposals to refurbish stations will be in the remit of Network Rail, not the Secretary of State.

Robert Syms: I am glad the hon. Gentleman pointed that out.
	We reached the point when the Conservative Government decided to privatise the industry. Did they get it completely right? No. We have acknowledged that from the Opposition Benches. My hon. Friend the Member for North Essex (Mr. Jenkin) acknowledged on several occasions that we would do some things differently. The industry was probably too fragmented. Various local operating companies did not have long enough to undertake the work; seven years was too short for specific contracts. It is a matter of common concern that too many experienced people who had worked for British Rail took the opportunity to leave the industry. That meant that it was bereft of many experienced people.
	I am a veteran of the Transport Act 2000. Apart from the aspects that affected National Air Traffic Services and quality contracts with buses, it also created the Strategic Rail Authority. On Second Reading, the Deputy Prime Minister said:
	"The Strategic Rail Authority will be the new guardian of the public interest: it will plug the loopholes in the Government's rail legislation, and will provide tough enforcement to protect the passenger."—[Official Report, 20 December 1999; Vol. 341, c. 540.]
	The Government did not essentially change the architecture that they inherited from the Conservative Government, except to provide for another tier in the SRA.
	When other hon. Members and I asked in Committee from where people would come to work for the SRA, it was said that some of the BR people had transferred to the Department for the Environment, Transport and the Regions on privatisation and that they would doubtless work for the SRA. There was already a shadow authority, but the staff would move. Four years later, we are now suggesting that those people will move back to the Department. We are shuffling people around and the magic solution of four years ago has turned out not to be magic. As my hon. Friends said, the Government have acknowledged it to be a failure but it would have been better if they had not pursued it four years ago.
	The major change has occurred through Railtrack's financial difficulties, leading to the creation of Network Rail. Several hon. Members have said that there is unfinished business to do with Network Rail, not only on public debt but on accountability. Many of us who have had dealings with Network Rail do not find it the most responsive organisation in the world when it tackles constituents' problems. Perhaps the Bill would be more welcome to Opposition Members if we were tidying up some of the details or at least aiming to do that when some of the legal actions had been expended.
	Although privatisation was not perfect, it has led to a vast expansion in rail travel. As the Secretary of State said, we have more than 1 billion passengers for the first time since the 1960s and 45 per cent. more freight on the railways than in 1995. There has been much success and the Conservative Government who provided for that should be congratulated more. If there were a free vote on the matter, the result would be interesting because I suspect that many Labour Back Benchers hark back to the old BR days.
	There are several other concerns. I was pleased when the Secretary of State reiterated at the beginning of the debate the duty on Government to promote the use of the railways for the carriage of passengers and goods, for which the Railways Act 1993 provides. I am glad that that remains in place; several people were worried about it. People are generally happy about provisions to allow the Welsh Assembly and the Scottish Executive to prepare strategies for those parts of the United Kingdom but there is no reference to a railways strategy for England. That should be considered when the Committee examines the Bill in more detail.
	As several hon. Friends said, the number of clauses that deal with closures is interesting. Clauses 22 to 44 deal primarily with closures and there is anxiety about what will happen in future. Concerns have been expressed about the community strategy and several hon. Members have mentioned Beeching. I therefore look to the Minister to provide reassurances, and perhaps a much broader explanation of the extent of the focus on closures, in his winding-up speech.
	Several explanations have been given about accident reports and investigation. I will not dwell on that, but the subject causes concern. There is also anxiety about schedule 4 and the ability to determine the scope and size of the network. Concern exists about its general wording and especially proposed new paragraph 1G. It has been suggested that the provision, in granting the Secretary of State the ability to determine the scope and scale of the network, allows him to override private sector contracts, contrary to his undertaking to Parliament earlier this year. The Bill is silent on compensation if that were to happen and I hope that the Minister will comment on that.
	We have a private sector industry that has done pretty well. It was not in a perfect state and, in retrospect, things could have been done better. The SRA was the Government's big idea. Earlier, I cited the Deputy Prime Minister's words on that. They were similar to those of the Secretary of State, who said that the Government were tidying up the problem and that, when they get rid of the SRA, they can sort things out. Yet the structure remains essentially the same as that that they inherited. The Government ought to back the system that they have inherited and stop fiddling around with other tiers. People would have rather more respect for them if they did that. At the moment, civil servants, having been transferred out of the Department for Transport to the SRA, are now being transferred back to the Department. Seven and a half years on, the private sector has been running the railways for longer under this Government than it did under the previous Conservative Government, and I think that people would expect the Government to have achieved rather more than they have done through the structural changes that they have introduced.

Tom Harris: Madam Deputy Speaker, I must begin by apologising to you and to the House for being absent for a short period at the start of this debate. My presence was once again required at a delegated legislation Committee.
	I broadly welcome this new legislation. For the three years immediately before my election to the House, I worked as chief public relations and marketing officer for Strathclyde passenger transport executive. I note that, since I left, the executive faces being wound up and merged with a new organisation. Perhaps it is a tribute to my work there that those who make these decisions waited until I had gone before deciding to abolish it. Or perhaps not.
	We must accept that there is a high level of public cynicism whenever a Government—however well meaning—try to reform the railway system in this country. Politicians tend to talk in the abstract on this subject, while voters tend to talk in the specific. One example of that occurred a few weeks ago, when the hon. Member for North Tayside (Pete Wishart) was telling a delegated legislation Committee about how awful the railways in Scotland were, based on his own recent experience of a delayed train journey. I pointed out to him that the Scotrail franchise had in fact performed better than all other rail franchises on the mainland of Great Britain, excluding the Isle of Wight. I accept his point, however, that a swathe of statistics will not provide much consolation for someone stuck on a delayed, dirty or cold train.
	The main debating point so far today has been the abolition of the Strategic Rail Authority, and the House has the right to ask whether the Government got this one wrong in the first place. The hon. Member for Spelthorne (Mr. Wilshire) asked why the Government had not apologised for creating the SRA, only to abolish it four years later. This Government could learn lessons from the Conservatives in regard to instituting legislation that turns out to be wrong but refusing to accept that it is wrong. I am grateful to the hon. Member for Poole (Mr. Syms), who came as close as any Conservative Member has done to apologising for the way in which the rail industry was privatised. However, his comments—conciliatory as they were—were in marked contrast to the belligerent tones of some of the other Conservative Members who have spoken today.
	I am glad that we have a Government who are willing to change direction when circumstances demand it. I am reminded of John Maynard Keynes's saying:
	"I change my mind when the facts change. What do you do, sir?"
	The answer from the Conservatives seems to be, "We maintain that we were right in everything that we have done." They ought, however, to accept that the general public see the privatisation of the rail industry as an unmitigated disaster. They should also examine the part that that privatisation played in their eventual electoral demise in 1997. There were clearly a number of factors involved, and the privatisation of the railways was only one small part of the fabric, but they should be aware that their own focus groups and internal polling—if they can still afford to carry out internal polling—will surely provide evidence that the general public view is that privatisation in 1993 was an unambiguously bad thing.
	I am glad to see that the right hon. Member for North-West Hampshire (Sir George Young) has returned to his place. It is one thing not to apologise for rail privatisation, but it is quite another for him to stand in this Chamber and claim that the capital value of the rail industry was so low when it was privatised because of scare tactics on the part of the Labour party. It beggars belief to suggest that the Labour party was in any way responsible for the disaster that was the Conservative rail privatisation.
	Let us examine the history behind the Conservative Government's decision to privatise the railways. Baroness Thatcher had refused to privatise the industry because she recognised that it would be far too difficult and electorally unpopular. However, when the new Conservative leader, John Major, took office, he knew that because most of his support came from the right wing of his party, he had to prove his privatisation credentials. The rail industry was the obvious target, and he went ahead without taking due cognisance of the dangers and pitfalls that his predecessor had recognised. We are paying the penalty for that action today.
	The SRA has not been a success. It has achieved very little over the past four years, and at very high cost. Another change that is being proposed, alongside the abolition of the SRA, is a fundamental change to the way in which the Office of Rail Regulation works. It is remarkable that some Conservative Members seemed to suggest that taking away the powers to invest and to set budgets from the ORR and giving them to the Secretary of State for Transport was somehow undemocratic. You say "tomayto"; I say "tomahto". You say "political intervention"; I say "democratic accountability".
	It was remarkable that the hon. Member for South Suffolk (Mr. Yeo) spent so much time criticising the fact that locally elected politicians, including the Secretary of State, who are accountable to the House were to be given more responsibility. Yet the Conservatives also criticised the fact that Network Rail was not accountable to shareholders. Apparently, it is perfectly acceptable for a company as important as Network Rail to be accountable, but unacceptable for democratically elected politicians—Members of this House—to be accountable in this regard. There is a fundamental flaw in the Conservatives' thinking on this issue.
	I wish that the right hon. Member for Bromley and Chislehurst (Mr. Forth) were present in the Chamber this evening. He has very sound views on unelected quangos and commissions—I regard the SRA as such—having some kind sovereignty over this Chamber, and having the final say on budgets, which Members of Parliament do not have. The very idea that the Office of Rail Regulation can set budgets for investment in the rail industry, while this House is powerless to do so, would be anathema to the right hon. Gentleman, and I wish that I could hear his views on the matter. I am sure that they would be more in accord with mine and those of my hon. Friends than with those of his Conservative colleagues.
	I hope that Conservative Members will accept—even in their opposition to the Bill—that certain achievements are real and can easily be measured. Is the 28 per cent. increase in passenger miles since 1997—the highest figure since 1946—something that the Government should be ashamed of? Would the Conservatives wish to denigrate that? The 27 per cent. increase in passenger numbers, which have reached 1 billion for the first time since 1961, is also something about which we have every right to be proud. Furthermore, there has been a 27 per cent. increase in the amount of freight carried on the railways, which is important when we consider the need to cut congestion on our roads. Those achievements are to the credit of this Government, and it is simply not enough for the Conservatives to say that our stewardship of the rail industry has not been successful.
	I want to take this opportunity, however, to point out that neither I nor the vast majority of Labour Back Benchers share the views of my hon. Friend the Member for Luton, North (Mr. Hopkins) on the renationalisation of the rail industry. The travelling public are entitled to something a bit more substantial than the sterile old 1980s view that everything in the private sector is bad and everything in the public sector is good—or vice versa, depending on which side of the political spectrum we come from. I actually think that there is a third way. I think that there is a possibility of the genuine public-private partnership that the Government are trying to achieve.
	It is too easy to look at the effects of privatisation with blinkers on. It is too easy to say that privatisation is all about private profit and lack of investment in the industry. The facts do not support that. The truth is that there is more investment in the privatised rail industry today than there was under British Rail, partly because, pound for pound, public money is being matched by private investment. We should not give that investment away lightly, and we would lose it if we opted for renationalisation.
	One example of the benefits of the current arrangement is Chiltern Railways, nowhere near my constituency. A local train service has blossomed and increased capacity and reliability specifically because of a local franchise that was withering on the vine under nationalisation. We should try to duplicate that best practice throughout the railway network.
	I want to concentrate on the threat that the Bill poses to passenger transport executives. As I said, I am a former employee of Strathclyde PTE, which has existed for more than 30 years and is the oldest part of Scotland's local government set-up. Unfortunately, as we speak legislation is winging its way through the Scottish Parliament that will eventually abolish the PTE, or at least merge it with a wider body covering the whole of Scotland. I think that regrettable, because Strathclyde PTE's achievements speak for themselves. During its time in charge, there has been an unprecedented expansion in the Greater Glasgow rail network and in other train and underground services, not to mention ferry services.
	I fear that, not just in Scotland but throughout the country, PTEs will lose their right to sign rail franchises. In Scotland the justification is that we have a Parliament, and Ministers in the Executive who are responsible for transport. Although I have reservations about that, there is a clear democratic argument for saying that Ministers rather than the PTE should have signatory powers. I understand that argument, but I would prefer Strathclyde PTE to continue to exist and to be co-signatory to the franchise in the west of Scotland, along with the Scottish Transport Minister. In England there are a number of passenger transport executives with a similarly successful track record, and although local services have improved under their stewardship they are being told that they will no longer have signatory rights following the Bill's enactment.
	I hope that the Minister will deal with this when he sums up the debate. If the reason for removing signatory powers in England was the same as the reason for removing them in Scotland—the prospect of a devolved Administration—we could ask whether, given the difficulties in the roll-out of regional assemblies in England, the argument had not been somewhat weakened. Might the Government consider changing those provisions in Committee? If I am lucky enough to be appointed to the Committee, I shall hope to table amendments to that effect.
	Ironically, in Scotland—particularly in the west, where my constituency is—because of devolution we face an immense amount of centralisation. In the context of this Bill and the Transport (Scotland) Bill, the situation is bizarre: having started with devolution, we are ending up with the centralisation of services. At present, passenger transport decisions are made by democratically elected councillors in the west—in Glasgow. Those decisions affect the daily travel of members of the public, including my constituents. Following the changes made by the two Bills, they will be made in Edinburgh by the Transport Minister, who is currently an MSP representing an Aberdeen constituency. I think my constituents have a right to be concerned about the fact that local knowledge developed over 30 years by Strathclyde PTE will be wasted, and they will no longer have any say over their own affairs.

Greg Knight: I am following the hon. Gentleman's argument closely, and I wonder where it is leading. Is he about to suggest that we should abolish the Scottish Parliament?

Tom Harris: Heaven forfend. The Scottish Parliament has many great achievements to its name, and I am sure that it will have a similar success rate in relation to transport. What I am saying—setting aside the fact that Scottish legislation would get rid of Strathclyde PTE in its present form—is that there is a strong case for allowing the PTE to become a co-signatory to the ScotRail franchise in the west, given the experience of its personnel.
	In fact I must thank the last Conservative Government, who accepted the argument for PTEs to be signatories. Strathclyde PTE has made a huge difference to the negotiations on the ScotRail franchise, first when it was won by National Express and again when FirstGroup won it this time. It devoted many thousands of staff hours to negotiating with the franchisee on all sorts of standards and efficiencies, and on demands that democratically elected politicians in the west of Scotland were naturally making for rail services. As a result, we in the west of Scotland have a much higher level of satisfaction with rail services.
	In my constituency, I am privileged to benefit from the Cathcart circle, which is heavily used by my constituents and by people throughout the city, particularly in the south. My constituents also rely heavily on the Strathclyde PTE underground, colloquially known as the clockwork orange. I shall explain that later: I see a quizzical expression crossing the face of the hon. Member for Poole. It is the third oldest underground system in the world, after those in Budapest and London. That may interest the train anoraks. In fact, it is called the clockwork orange because when it was reopened in 1980 after refurbishment the carriages had been painted orange, and they are entirely clockwork.

Robert Syms: I thought for a moment that it had something to do with ancient sectarian politics.

Tom Harris: I would not blame anyone for assuming that. It was probably a risky nickname, but it was not conferred by any authority in the city; it was conferred affectionately by some members of the community.
	When I was in charge of public relations for the clockwork orange—the Glasgow subway—I came in for a huge amount of personal criticism. My job was to publicise the underground, and one of my brainstorms was to suggest to the travelling public that football fans should not use the underground to travel to Ibrox, the Rangers football club ground, because the system was not big enough for that to be safe. Allowing 6,000 fans to travel to Ibrox station in the space of half an hour would run a high risk of people being thrown on to the track in front of trains. I will not repeat the language that was used about me in certain Rangers fanzines; I will merely say that all that was said was untrue, but I did not sue.
	I go back to the serious issue of local transport services, how those are developed and how political decisions are taken in the west of Scotland post this Bill and post the Transport (Scotland) Bill. There is already a perception that transport infrastructure projects such as the Edinburgh airport link and the light rail transport system in Edinburgh have been given precedence over similar projects in Glasgow, simply because the political focus has inevitably shifted in Scotland from Glasgow to the east coast, because of the Scottish Parliament. That is probably a welcome development for some MPs, for example, the MP for an Edinburgh constituency, say, Edinburgh, South or thereabouts—

John Pugh: Edinburgh, Central.

Tom Harris: That is what I was thinking of. Those MPs may not have any objection to that, but for those of us who represent a constituency in Glasgow, it is worrying.
	Let us remember the ethos behind setting up the passenger transport executives in the first place. They were initially proposed in the White Paper published, I think, by Barbara Castle in 1968. The whole point of them was that they focused on the country's conurbations. A conurbation was defined then, as now, as a metropolitan area whose population exceeded 1 million. Using that definition, and no one has come up with an improved one, Strathclyde remains the only conurbation in Scotland, yet effectively, we are about to lose the passenger transport executive that was set up specifically for that conurbation.
	That is a huge shame and I deeply regret it. I only hope that, post the changes, politicians in Edinburgh will be able to work closely with politicians in Glasgow and in the west of Scotland to ensure that some of the infrastructure changes for which we have campaigned for many years, including the Glasgow airport link and Crossrail, are not left to wither on the vine, as some people fear they may be.
	The community rail partnerships have been denigrated by some Conservative Members. I am surprised at that. This week, The Economist rather unkindly referred to the people running community rail partnerships as do-gooders and train nuts. That is a bit harsh. We are talking not about a back-door way of the Government closing under-used rail services, but about the possibility of rural rail services being brought out of mothballs and run by the local community—by people who are extremely interested and enthusiastic about running local rail services. That may not be appropriate for every mothballed service but 40 of those partnerships already exist in Britain. Surely, if they work—it is probably a bit early to decide whether they do—and if they provide what is intended, which is the rejuvenation of small lines with variable passenger numbers, every hon. Member, whatever side of the House they sit on, will welcome it.
	Economies of scale are mentioned in the White Paper and in the Bill. One of the problems with the existing regime of the SRA and the Office of Rail Regulation is that costs are running out of control. As I have said, currently, Ministers have no legislative right to call those costs into line or to question how the ORR is coming up with those sums of money.
	It happens with every capital project in this country and it has become a truism: anything that we buy in Britain costs more than what we would pay for it on the continent, whether we are downloading music, buying a suit or eating in a restaurant. It is accepted that in Britain things cost more money. That does not explain why in Germany the cost of building a new train station is the equivalent of £240,000 but in Britain we would not get much change from £1.5 million.
	The Government must look at that urgently. If we are going to get value for money for our constituents and to make the money that we spend, and that is a lot of money, go as far as possible, we must ensure that every penny is spent wisely. Why are capital projects on the railways costing six to eight times the amount that the same projects cost on the continent? We must look at project supervision, at building standards and at the process for initiating those capital projects.
	As I have said, I warmly support the Bill. There is a level of cynicism among our voters and the general public. Whatever improvements are made in rail services, it is no consolation to be told that a particular franchise has been performing well when one has been stuck on a cold and dirty train for two hours after it broke down. That is a difficult public relations barrier to get over, but I feel quite optimistic about the Bill. Some hon. Members are being unnecessarily oppositionist in their approach to it.

Greg Knight: One of the reasons why Conservative Members have concerns is that there are 22 clauses in the Bill to do with closures. Does not that worry the hon. Gentleman?

Tom Harris: That is an issue that I look forward to debating in Committee, if I am lucky enough to be appointed to it, but few of the criticisms made by the hon. Member for South Suffolk focused on the closure clauses. Most of his criticisms focused on the SRA. He criticised it, but then he criticised the Government for wanting to abolish it. He also criticised the amount of money that has already been spent on the rail industry under the Government's stewardship. Few of the criticisms focused on closures. However, all of us have railways in our constituency. Obviously, none of us wants to see any particular line closed. That is a legitimate concern, but it is not what we have heard this evening from Conservative Members. We have heard criticisms, a defensive attitude and, with the honourable exception of the hon. Member for Poole, a reluctance to admit that most of the problems we face in the rail industry stem from the botched privatisation. I see the right hon. Member for North-West Hampshire shaking his head, but he is not getting up to intervene and frankly I do not blame him.
	The Conservative Opposition confirm public perceptions. Having made a mess of privatisation, they have no solutions to offer. We have sat in the House for quite some time and we have heard many positive ideas from the Labour Benches—from the Back Benches and the Government Benches. We have heard almost nothing from Conservative Members that will address the problems that we all face day-to-day on our railways.
	I hope that the Conservative party continues with that attitude for the next five months at least. I hope, too, that the hon. Member for Spelthorne will be appointed its transport spokesman and put on the "Today" programme and on "Newsnight" every night between now and the general election, because that would do us nothing but good.
	The Conservative party has not learned the basic lesson from its defeat of 1997. It has not learned to say sorry. Even when the Leader of the Opposition is questioned on pensions, instead of saying, "We got it wrong 20 years ago and we are trying to put it right now," which is what he should have said, even though he would be wrong in doing so, he said, "We were right then and we are right now." The Conservative party cannot win the debate on transport by saying that it has always been right and has never made a mistake—but strength to its elbow. That is exactly what it is doing and I hope that it continues to do it for a long time to come.

John Pugh: I seem to have temporarily become a Front-Bench spokesman—but I appeal to you, Madam Deputy Speaker, not to be taken in by that.
	It is some years since I was on the Select Committee on Transport, or the Transport Sub-Committee of the Select Committee on Transport, Local Government and Regions as it was then known, under the benign and kindly chairmanship of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), but I hope to be on the Standing Committee and I will venture a few modest observations at this stage.
	Under the stewardship of the right hon. Member for Tyneside, North (Mr. Byers), railways were right up the political agenda and debate was febrile and heated. Under the current Secretary of State, however, the atmosphere is calm, even at times positively soporific. We have the illusion that all is going well under his steady control, but that is not quite the case. Were he the captain of the Titanic, no one would be unduly alarmed and all would be calmed by his generally mellifluous tones. However, the essential problems of the railways still exist and, as many hon. Members have said, have been there since privatisation.
	Fragmentation was the buzz word when I was on the Select Committee. It is still manifestly present, several times over and writ large, in recent reports. The Transport Committee says precisely that in "The Future of the Railway", its most recent report. It comments that fragmentation is not only still in evidence, but in some ways more in evidence than ever before.
	The Bill appears to get rid of one fragment—the SRA—by taking powers upwards to the Department for Transport and devolving some powers downwards to the PTEs. That is the central thrust, as I understand it. The rest of the Bill is largely concerned with strategies for what is called "network modification", which is ministerial talk for closure and contraction. As has been explained, that is what most of the clauses do. We are in a new phase. Gone is the bold new dawn of the 10-year transport plan. In theory I cannot, and my party certainly cannot, object to one fragment less. However, as many hon. Members have stressed, that falls short of linking track and train, which others have asked for and see on the horizon. It leaves all the old excuses for failure in place, with each side claiming that the other side is at fault.
	I come from an area in which the railway service is performing relatively proficiently, as the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth) said. We come from the same area, and I can testify to the fact that the Merseyside passenger transport authority is go-ahead and positive in its general effect. However, every local authority—even the most positive and compliant—should always fear a Government bearing gifts and devolving powers, because it often means little more than transferring the responsibilities for subsidies, or transferring only part of the subsidy. The sub-plot is for central bodies to subsidise less and local bodies to subsidise more. That leads to the prospect of underfunded lines being closed by underfunded PTEs, and the Government not taking the rap for it.
	If that is what results—and it need not necessarily be the case—it is hard to see that as a complete answer to fragmentation. However, I venture to say, possibly in compensation and perhaps to excuse the Government, that there cannot be a worse and less efficient public subsidy system than the one that we had before. I defy human ingenuity to come up with something less competent.
	In my area—if I can put in a plug for it—a pittance spent on restoring one mile of rail track—the Burscough curves—could turn the whole Mersey railway system from a radial shape to an efficient loop, increasing massively the utility of disconnected railway lines, such as the Ormskirk to Preston line, currently vulnerable and seemingly under threat. That would provide enormous customer and economic benefits. We could do that with the small change, or even the tea money, from projects like the west coast main line or Crossrail. In many ways, PTEs can achieve far better effects.
	My local PTE would not fall for the suggestion that the Southport to Manchester airport line was vulnerable or uneconomic, which it was listed as a few days ago. That is an SRA view. The real reason for saying that is that it might delay for a few seconds the west coast Glasgow to London main line, on which so much money has been spent—expenditure that the Government must try hard to justify. It is as though those few seconds matter more to passengers, whose main gripe on that line is overcrowding on trains that are half empty because half the carriages are first class, and a first-class ticket costs the same as a week in the Algarve.
	If the Bill passes power to the PTEs, I genuinely do not think that they can do a worse job unless—perish the thought—they do not get properly resourced. The Bill can be read—although this is perhaps a cynical reading—as providing what the accountants used to call a special purpose vehicle. They used to say that when they were closing down Railtrack. Its special purpose could be to please the Treasury and contract the network, which has hitherto been so hopelessly mismanaged. I would go into Committee with an open mind to discover what the Government said about their legislation, but their approach could give the signal, which it should not, that they have given up on railways, and perhaps also on public transport as a whole.

John McDonnell: We heard the Secretary of State present the Bill with his usual efficient good nature. We heard a range of views from the Conservative party, its Front-Bench spokesman and others, in defence of privatisation. We also heard the views of the Liberal Democrats from the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) and, more recently, the views of new Labour.
	I thought that I would speak on behalf of the Labour party and address the Bill on the basis of Labour party policy, which was fairly straightforward at the conference in October this year. It does not seem to be contained in the Bill, but not to worry, because I shall draft a new clause, which I am sure will be acceptable to the Front Bench as it will reflect the partnership in power policy-making process that the Prime Minister introduced into the Labour party to enable people to introduce a minority report on a particular decision and policy. That is then brought to the Labour party conference, and delegates at the conference, which is the supreme policy-making body of the party, vote on it. In this case there was an overwhelming vote in favour of what can only be described as a policy to introduce legislation for an integrated, publicly owned and public accountable railway system. That is what I shall suggest the Bill be amended to reflect.

Tom Harris: I do not want to pre-empt my hon. Friend's comments, but I assume that he is about to mention that 78 per cent. of constituency delegates voted against that policy.

John McDonnell: What is interesting about that statement is that I did not support the partnership in power process that the Prime Minister introduced into the Labour party—but it is supposed to have an impact on the Government's policies as part of democratic accountability. However, there is a break in the chain of the accountability of the Prime Minister to the Government to party. Overwhelmingly, the Labour party conference—

Madam Deputy Speaker: Order. This is a Second Reading debate, and I request the hon. Gentleman to confine his remarks to the Bill.

John McDonnell: Certainly.
	The overwhelming decision at the Labour party conference was for the Government to introduce legislation to bring rail back into public ownership. The Bill does not do that. It does not do what the Labour party decided, but this is the view of the Government. I thought that someone in the Chamber should at least represent the Labour party in the debate, and that is what I am trying to do. In addition, the Bill also does not implement London Labour party conference decisions made on Saturday—I think unanimously—to ensure that South East Trains is kept in public ownership and control, so that it continues to be publicly run. Again, I thought that someone should stand up and represent the London Labour party as well.
	The gap in the Bill is that there is now no clause to bring forward public ownership and public accountability. I agree with my hon. Friend the Member for Luton, North (Mr. Hopkins) that this is one in a transitional series of Bills that overcome the problems of privatisation introduced by the previous Government. Slowly but surely we are reintroducing a publicly owned and publicly accountable railway system. The first Bill that the Government introduced tried to overcome some of the problems of privatisation by trying to establish at least some form of rational structure for strategic policy making, and established the Strategic Railway Authority, which was neither strategic nor much of an authority on railways. The Government are seeking to address that through legislation that will bring many of its powers back under their control. I welcome that as the next staging post to a fully publicly owned and publicly accountable system.
	Why are the Government moving towards the reinstatement of a mechanism that is like British Rail? The reason is clear. In every opinion poll, two thirds of the British public say clearly that they want a move back to public ownership and public control. Why are they introducing this legislation today? It is a reaction to privatisation over the last decade and a half.
	It was clear from the comments of some Opposition Members who have tried to justify privatisation that lessons have not been learned. As a country, we poured £10 billion in subsidy into private companies, which took the profits from the privatisation, £1 billion of which went directly into the pockets of shareholders. Each time, the argument is that if legislation is enacted to end privatisation, we will lose the supposed £70 million a day subsidy from the private sector. At some stage in the debate, we must go past GCSE economics—"failed". Where does the £70 million from the private sector come from? It comes from the public subsidies that we pour into the private companies, making their profits, or from the fares that we impose on passengers. It is recycled public money, for which we are supposed to be grateful. In the days of British Rail, it came as a direct subsidy. We have heard a lot of criticisms of British Rail today, but if we read the Catalyst report that was prepared, we see that pound for pound, in terms of investment and return, British Rail, despite being starved of resources for a long period, was the most efficient and productive railway system in Europe.
	What could this Bill do? First, it could introduce a new clause bringing rail back into public ownership and making it publicly accountable. I will draft that clause for the Minister later. Secondly, it would be easy to amend clause 12 so that South East Trains is not forced out into another franchise. I agree with my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris)—if it ain't broke, don't fix it. At the moment, South East Trains is proving to be an effective and efficient railway service within the public sector. And what are the Government doing? They are privatising it again. Bizarrely, it is likely that South East Trains will probably still be state owned—but it will be owned by the Danish state railway company, which will bid for it in future.
	The Bill therefore has the potential, first, to hold back further privatisations, and secondly, to include a simple clause to enable the Government to take back into public ownership individual franchises as they run out over the coming years. In that way, without any cost—although we have heard from the Secretary of State previously that the cost of bringing rail back into public ownership would vary from £3 billion to £20 billion, to which it increased at the Labour party conference—rail could be brought back into public ownership, as the public demand.
	I do not think that the Government have the guts to go along that path. In due course, however, they will, and new legislation will be introduced. This Bill is just a staging post. In the meantime, let us at least use it to address some of the anomalies within the industry.
	First, I want the Government to address the anomaly of a two-tier work force in the rail industry, particularly with regard to travel facilities. I have drafted an amendment—it will be available to Ministers in Committee—which will end the two-tier work force, whereby staff employed prior to privatisation enjoy safeguarded travel facilities, whereas those employed following privatisation do not have such a guarantee. Before the privatisation of the rail industry, all British Rail staff received nationally negotiated travel facilities, which were subject to the same universal rules and principles.
	In a written parliamentary answer in 1993, the then Minister confirmed that about 500,000 people enjoyed such concessionary rail travel, and that the cost was negligible and largely administrative. More recently, the National Union of Rail, Maritime and Transport Workers secured with one infrastructure company a 75 per cent. reduction on standard fares for staff when travelling on services provided by three train operating companies. The scheme costs £1,000, which covers basic administration costs for 475 workers. The cost is fixed, and would not increase if more workers used it. As a result, the company has provided travel facilities for its staff at a cost of just over £2 per worker. It would be easy to amend the Bill to establish a universal scheme, thereby ending the two-tier rail work force.
	Another anomaly under the current system is that the SRA can intervene in industrial disputes. It can subsidise companies engaged in disputes with their work force simply by guaranteeing, through the grant regime, that companies affected by industrial action will not disbenefit financially in any way by failing to meet their targets. There is thus no incentive for such companies to settle disputes. That power, which currently pertains to the SRA, is being transferred to the Secretary of State. I did not think that it was the Secretary of State's role to intervene in industrial disputes in any industry. In fact, in dispute after dispute the Government have consistently made it clear that it is not their role to intervene between management and workers. Yet if this provision is retained in the Bill, that power will be transferred to the Secretary of State. Again, a simple amendment to clause 1, which deals with the transfer of functions, would enable the Secretary of State to have clean hands and not become part of the rail industry's industrial relations machinery.
	There are some other worries that we need to express today. I reiterate the concerns expressed about the transferring in clause 2 of the Health and Safety Executive's rail safety functions to the Office of Rail Regulation. My simple amendment would do away with that proposed transfer, and would enable an independent safety regime to be maintained. The problem with transferring safety to the ORR is that it is not guaranteed to be independent of economic pressure. The Government's proposal subordinates rail safety to economic regulation and brings the two elements within the same organisation. That flies in the face of Lord Cullen's recommendations following the Ladbroke Grove train crash.
	During the consultation process, I urged the Government to listen to the organisations that deliver the service. During the rail review, the Health and Safety Commission, the HSE, the TUC and the rail unions all made strong representations to the Government opposing the transfer of Her Majesty's rail inspectorate from the HSE to the ORR. The TUC fact sheet, which was distributed to many Members, said:
	"If safety regulation formed part of any body that made decisions about funding and/or economic regulation, there would be a real risk that safety would be compromised when economic decisions are made that have safety dimensions."
	At one point the Secretary of State made clear the priority that he gave to safety. He said that it should be "in with the bricks" of any organisation. But many of us believe that the transfer of responsibility is motivated by a desire to placate elements of the private sector that hold the mistaken view that railway safety regulation is gold-plated—an expression that has been used in the Chamber today. Those on one side of the industry are seeking to push down costs, some of which the management themselves are responsible for. However, saving costs on safety measures is a false saving. Anyone with a constituency involvement in Southall, Paddington or any other place in which a recent rail disaster has taken place will understand the implications of putting cost savings before safety.
	The other concern that many of us feel—it has been expressed today—is about clause 39, which links in with clauses 40 and 41. Those provisions relate to the powers that will now be given to end certain services, and sometimes to replace them with bus services. The concept of "bustitution", as it is now called within the industry, has opened up a vista, which some hon. Members have described today as a vista of a new Beeching, and the end of small community lines, which we thought were being protected over the year.
	Launching the rail review in January 2004, the Secretary of State said that decisions on the provision of local transport were often best taken by the people who provide and pay for the service. Devolved decision making would enable sensible and informed decisions to be taken between bus, light rail and heavy rail. "The Future of Rail" White Paper of July 2004 made it clear what the Secretary of State meant when he spoke about "sensible and informed decisions" back in January. It said that the document promised to put in place arrangements making it easier for bus quality contracts to be introduced as part of a strategy that included reductions in rail services.
	The Bill confirms that position. Clause 39 gives passenger transport authorities the power to make a quality contract scheme "if they are satisfied" that it is
	"an appropriate way of securing that the transport needs of the potential users of a relevant railway service that has been or is to be reduced or discontinued are met".
	That opens the door for what many fear will be large-scale reductions in rail services.
	Clause 40 allows the Scottish Executive and the Welsh Assembly to provide a substitute road service route where
	"a railway passenger service has been discontinued",
	but it
	"need not correspond precisely to . . . the discontinued service if . . . it is not practicable  . . . to do so; or . . . the substitute service broadly corresponds to the discontinued service in terms of the localities served."
	The danger is in the wording "broadly corresponds", which could lead to existing communities currently served by rail not being so served in future, but being offered replacement road services. Experience of the Beeching cuts shows that the patronage of bus services introduced to replace rail is fairly low, leading eventually to the bus services themselves being removed, leaving whole areas without public transport.
	The threat of bustitution is compounded by other proposals in the Bill, which will make it easier for funding authorities to close railway lines. Clause 42 will weaken the safeguards against line closures. Previously, the criterion was whether closure would increase passenger hardship, but the new guidelines provided by the Secretary of State also cover economic, financial, environmental and social factors. The assessment will no longer be made by regional rail passengers committees, but by the funding authorities themselves—those who are making the proposals for closure in the first place.
	My final, more general point was made early in the debate, but glossed over in ministerial responses. The failure to transfer to the shoulders of the Secretary of State the current duty of the Strategic Rail Authority to promote rail is a real concern. Previously, clause 205 of the Transport Act 2000 set out clearly that the SRA had the responsibility
	"to promote the use of the rail network for the carriage of passengers and goods . . . to secure the development of the rail network, and . . . to contribute to the development of an integrated system of transport of passengers and goods."
	All that now goes, and all we are left with is a general commitment by the Government to improving the overall transport system—not specifically rail. That is a real worry. There is now no voice for the rail industry overall. That is why this legislation should transfer the previous powers, responsibilities and duties of the SRA at the very least to the Secretary of State, if not to a new agency.
	I make one final prediction. We shall return to debating this subject within five years, and new legislative proposals will be before us. They will probably scrap most of the proposals in the Bill, and may well attempt to set up some form of public railways agency that will bring the railways back into public ownership, making them publicly accountable, publicly funded and generally popular with the British public.

George Young: It is a pleasure to follow the hon. Member for Hayes and Harlington (John McDonnell). It would be fair to say, however, that he and I approach the railways from different philosophical perspectives. I hope that the Government will resist his blandishments to take the railways back into public ownership, but as a member of the Selection Committee, I also hope that, when we meet on Wednesday to appoint the Standing Committee, the Government Whips will have the good sense to appoint him, so that the radical amendments that he trailed in his speech can be fully considered.
	In my brief contribution, I wish to examine what has remained the same in the past 10 years and what has changed. The landscape still contains many familiar features. The track, signalling and stations are in unified ownership and depend predominantly on the private sector for funding—on Railtrack in the past and now on Network Rail. The rolling stock companies—ROSCOs—are in private ownership and lease the rolling stock to the train operating companies. A series of TOCs, which are in the private sector, compete for the various franchises of different lengths. The basic landscape has not changed that much in the past 10 years. We have had an element of stability, to which my hon. Friend the Member for South Suffolk (Mr. Yeo) referred.
	What has changed is the focus. When the industry was privatised, we tried to set up a structure in which the TOCs looked outwards towards their customers—their market—to make the industry more responsive to the needs of the consumer. At the funding end, we wanted an industry that looked to the private sector—the City—to raise the capital needed to fund the improvements that we all agreed were necessary. That outward looking industry was an essential component of the reforms that we introduced.
	The Bill will change those two perspectives and move back towards the situation that existed before 1993, when the Government and the Secretary of State had a more important role. That is likely to lead us back to the position of the 1980s and 1990s, when the industry simply could not access the capital it needed for modernisation. I remember when I was Secretary of State for Transport under the last Conservative Government. I attended a series of Cabinet Sub-Committees that were deciding the allocation of public expenditure. The argument was that the Government's top priorities were health, education and law and order, so the resources for transport came well down the list. That was one of the reasons for privatising the railways, as it had been for privatising other nationalised industries. It was done to open up access to capital and to bring the industry into the 21st century.
	Following the debacle of Railtrack, the industry once again has to look to the Government for more and more of its capital to keep it going. Some of the ambitious projects that we hoped to get off the ground a few years ago have now gone back to the end of the queue. I am very disappointed that Thameslink, which I thought that I had signed off nearly 10 years ago, is still nowhere near inception. I had also hoped that we would have started on Crossrail by now, but it is still a dream with no serious Government commitment to it. That is one consequence of the industry becoming once again more dependent on the Government for its funding than the structure that we envisaged at the time of privatisation.
	I was interested to look at the back of the Bill to see how many pages of repeals there were. I see that there are about the same number of repeals of the provisions of the Transport Act 2000 as there are of the Railways Act 1993.
	I hope that the Secretary of State will use the powers he receives under the Bill to allocate longer franchises. I am sure that I am not alone in having several stations in my constituency that need investment. Andover, Grateley, Whitchurch and Overton stations all need larger car parks to cope with increased demand for the railways. However, the TOC has a short franchise and cannot justify the substantial investment necessary to expand the car parks. The TOC referred me to Network Rail, but it does not have the capital to make those modest improvements because it has all been spent on the west coast main line and other desirable projects. I hope that we can seriously consider granting longer franchises to give the TOCs the incentive to invest in improvements to stations, car parks and security.
	My last point relates to clause 6, under which the Secretary of State will be given powers to give guarantees and to make grants and loans, and to the classification of the guarantees and loans that the Government will provide under that clause. As the House may know, there has been an argument between the Office for National Statistics on one hand and the National Audit Office on the other about the status of the guarantees that have been given through the SRA to Network Rail. With the SRA disappearing from the equation, those liabilities will now fall on the Secretary of State.
	When the Secretary of State made his statement earlier this year, he said:
	"It follows, therefore, that the Strategic Rail Authority will be wound up, and that the majority of its functions, including all its financial obligations, will be transferred to the Secretary of State."—[Official Report, 15 July 2004; Vol. 423, c. 1547.]
	One might assume from that that the SRA's liabilities will be absorbed into the Department for Transport and that Network Rail's liabilities will therefore end up on the Department's balance sheet. If so, the Chancellor's statement last week would be seriously affected, because some £9 billion of borrowing would then reappear on the Government's balance sheet. I want to press the Minister to make it clear that, under the new structure, Network Rail's liabilities will indeed be Government liabilities.
	Chapter 3 of the White Paper says:
	"The Secretary of State . . . will take responsibility for setting the national-level strategic outputs for the railway industry, in terms of capacity and performance."
	It continued:
	"This means that the Government will be responsible for deciding the overall size and shape of the network; the key time-table outputs; policy on regulated fares; minimum performance targets; enhancement priorities",
	and so on. In respect of the criteria used by the ONS to determine on whose balance sheet such things appear, the ONS says:
	"the guiding principle for classifying institutions as public or private is who exerts control over general corporate policy, including the appointment of directors."
	It is absolutely clear that, under the Bill, Network Rail is, in effect, an agency of the Government. Any concept that Network Rail is simply an ordinary private company, doing what it wants and borrowing against its own credit in the market, is strictly for the birds. It will do what the Government ask it to do. No one would dream of lending money to Network Rail unless a Government guarantee was behind it.
	I hope that the Minister will address a specific question in winding up the debate: will he confirm whether, when the Bill is passed, Network Rail's debts will appear in future as Government debt and be part of the public sector borrowing requirement?

Jeremy Corbyn: I apologise to the House for missing three of the past four contributions—I was attending a meeting—but I was here at the start of the debate.
	I welcome the Bill in principle, as it goes some way towards addressing some of the problems of the rail industry, which is very important in this country. I particularly endorse the work done by my hon. Friend the Member for Hayes and Harlington (John McDonnell) in chairing the RMT group in Parliament and the speech that he gave this evening.
	The Bill gives us the possibility of getting rid of the SRA and of both unifying national decision making where it ought to be made—by the democratically elected Government in the House of Commons—and introducing regional activities through the Scottish Parliament, the National Assembly for Wales, TFL and the PTEs around the country. I shall say more about that in a moment. All that is welcome and a good step forward, but we must look at the Bill against the background of what was a sad and disastrous period for British railways before the Government's election in 1997 and, indeed, British Rail's treatment as an organisation in the past.
	British Rail was starved of investment for many years and its services suffered as a result. It was universally pilloried and made a joke of by large sections of the media, but in many ways it was an innovative organisation. It achieved a great deal for train travel through the development of the high-speed train and the advanced passenger train. Those passing through Crewe can see the sad wreck of an APT, which has been parked in the sidings for years. The APT was overtaken by the Pendolino train run by Virgin—but where did the technology for the west coast main line Pendolinos came from? It came from the work done by British Rail Engineering and British Rail Research in Derby, which developed the APT. Sadly, the project was abandoned because the Government of the day were not prepared to see it through, and as a result we have had to buy in the technology from elsewhere. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) made some valuable comments on research and development in the railway industry.
	The position after privatisation is interesting. Immediately before privatisation, the Conservative Government increased investment in the railways to form the basis for privatisation—in other words, they fattened them up. They then sold the whole industry off at knock-down prices and all the ensuing scandals and problems continue to haunt us today. Huge profits were made from rolling stock companies that were bought by former BR managers then instantly sold on; they are now extremely profitable enterprises. Huge profits were also made by people dealing in railway infrastructure and land sales immediately after privatisation.
	We have made some progress since then, but the fact is that Britain now invests and spends more on its railways than any other European country. We provide a far greater subsidy than was ever enjoyed by British Rail at any stage in its history, yet enormous profits are being made from our railways by the train operating companies. When the original GNER franchise was handed out, the director of the company that got it admitted that he did not really know what he had got. He knew that he had the right, the obligation and the duty to run a train service along the north-east coast main line, but he also knew that his costs in running that service were guaranteed. Therein lies the problem: we are pouring huge sums into train operating companies, and much of the money disappears only to emerge elsewhere as profits.
	When the companies fail to deliver and collapse, someone has to step in and take over, as happened in the case of South East Trains. Now, however, we are told that the public sector is not good enough to run the services and they have to be passed to someone else. I ask the Minister who will reply to give us some clear answers. South East Trains is better run and more efficient and the public are happier with it, so why not stick with the arrangement and allow a publicly deliverable service to remain in public hands? To do so would be a useful step forward and demonstrate a commitment to the principle of public operation of our railways, as well as public investment and public ownership of the track itself.
	One part of the Bill that I welcome is the transfer of some powers to Transport for London and the accompanying possibility of integration of services. TFL is to take over the franchising operation for Silverlink Metro services. I assume that other services—not inter-city mainline services, but regional and local services that go in and out of London—could also be administered by TFL, by agreement. If that happened, we might see more imaginative developments of services. Let me give an example.
	For a long time, Silverlink has run services on the north London line, which extends from Richmond to North Woolwich, and trains then run up to Northampton, Rugby and Birmingham. It also administers trains on the Barking to Gospel Oak line which, like the north London line, runs though my constituency. The Barking to Gospel Oak line is a sadly underused line, which has been kept going only through the diligence of a local users' group that has campaigned assiduously for many years. The service has improved somewhat and I hope that when TFL takes over administration of the franchise we will see far more imaginative services and the development of an outer-London rail ring.
	I agree with the Secretary of State that the harmonising of ticketing and travel arrangements in greater London would do much to integrate tube, rail and bus transport with many other essential services.

Diane Abbott: Does my hon. Friend agree that the north London line is vital for my constituents in Hackney, as it is the main interchange for access to the underground? While we welcome the line being handed over to TFL, we hope that the organisation will have the capacity to raise money so that that important line for the people of Hackney can receive the investment that it needs.

Jeremy Corbyn: My hon. Friend makes a good point, as Hackney is the only borough in north London that does not have any access to the tube network at all. However, one exit from the Manor House tube station is in Hackney, so there is a connection to the borough. My hon. Friend refuses to accept that assertion, even though she and I have walked up that very staircase while campaigning—one simply cannot persuade some people on those matters.
	My hon. Friend is right about the improvements to the north London line and the need for integration. For people in most parts of Hackney, the north London line is the only east-west public transport route that they can use, but some of the stations are, frankly, grim and dangerous. The number of crimes in those stations is tragically high, and they are not safe places late at night. More investment is needed and, whatever arrangement TFL reaches with Silverlink or any other operator, I hope that it will insist that every single station is staffed, as that is the only way in which we will attract people back to the railways. They want to travel on them, but if the stations are not safe at night, they will not.
	The Mayor and TFL have reached an agreement, which I believe the Government support, about reopening the east London line extension. It was short-sighted to close it, so I welcome its reopening. I have nothing against Hackney—it is a wonderful place that I love dearly—but why should the east London line stop there?

Diane Abbott: Why not?

Jeremy Corbyn: Some people may wish to get off in Hackney and shop in Kingsland road, but others, understandably, wish to travel on to Islington. It is short-sighted to spend a large amount of public money on rebuilding the area around Bishopsgate and rebuilding the line up to Dalston only to fail to link it to the existing track on the north London line. It could run on to Highbury and Islington in the first stage of development, with the option of extending it to Finsbury Park, which would develop into a local hub. I look forward to some imaginative ideas and I hope that, when TFL takes over, it will be able to put them into effect and develop new stations, including one at Tufnell Park on the Barking to Gospel Oak section of the line.
	Turning to the notion of a community railway, there are concerns about bustitution. The railway map of this country shows a dotted line in north-west Norfolk, pretending that there is a rail substitution bus service from King's Lynn to Hunstanton and on to the network at Cromer. That is not, by and large, the case. The service was provided as a sop to people who, in the 1960s, opposed the Beeching closure of those lines. If we overlay the current railway map with a pre-Beeching one we can get an idea of the huge number of lines that   we have lost throughout the country. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who chairs the Transport Committee, is right that bustitution is a quick fix. In the short term, it is cheaper and simpler to operate a bus service than a railway. However, many passengers are lost, and people are encouraged to use cars to reach the main line terminus. Having driven there, they then decide that they might as well drive the whole way.
	If we are serious about encouraging people in the long term to make journeys by rail, that will not be achieved by bustitution and branch line closures. The examination of branch line use is an undeveloped science and some of it is extremely short-sighted.
	When I was first elected to the House, my great friend, the late Member for Bradford, South, Bob Cryer, was campaigning to prevent the closure of the Settle to Carlisle line. He sat where the Liberal Democrat spokesperson now sits and he asked hundreds and hundreds of questions. He bored the House rigid on the subject of the Settle to Carlisle line. He was told that it was expensive, that it was a waste of money, that the bridge infrastructure was decrepit and so on. But the line was saved. It was not closed. Now ask any rail operator, "Should we close the Settle to Carlisle line?" and they would say, "You could not think of closing it. It is a vital bypass for the west coast main line when that does not work, a large amount of freight goes along it, and it has been a contributory factor in bringing some tourist and other life to the villages along the line." It is now seen as a valuable network.
	Think of that campaign and compare its success with the suggestion that some branch lines—for example, those in the west country, such as the Exeter to Barnstaple line—are too expensive and should be made ripe for bustitution. That does not help. It diminishes the railways as a whole.

Tom Harris: I know that my hon. Friend was not present in the Chamber for my outstanding contribution, which I am sure he would have enjoyed. He may be too negative about what community rail partnerships could mean. I accept that he is raising a real concern, but throughout the country community rail partnerships are providing an opportunity to bring out of mothballs rural lines that were previously closed and could now be reinstituted by local people and interest groups. I am sure that he would welcome that.

Jeremy Corbyn: Yes, and I am sorry that I was not present for my hon. Friend's speech. I recognise, and I am sure that the Select Committee Chair would agree, that community rail partnership in the best sense can be the saviour of lines and lead to their development. What concerns me is that it costs money to run a local line and it should not be seen as solely a local cost or resource but as part of a much bigger and wider network. I know that there are examples such as the development of the Alloa line in Scotland and the reopening of part of the Waverley line. I hope that the whole of the Waverley line will eventually be reopened, right through to Carlisle. That is another area of the country that should have been redeveloped.
	I hope that the Bill will not be the start of some subtle Beeching-type closure by a curious form of voodoo economics that decides that particular parts of lines are not profitable enough. I hope that the Bill will instead be the protection and renaissance of such lines. There are, however, some strategic decisions that need to be taken. Why, for example, after all these years have we still not achieved a decision on the reopening of the east-west route? The reopening of the line between Bletchley and Bicester, linking up with Bedford all the way through to Cambridge, March, Felixstowe and the east coast ports, would be a massive development and improvement for the rail network. We are speaking about reopening only 25 or 30 miles of track, the bed of which is already in place and in quite good condition. That is the kind of imaginative decision that I look forward to.
	I hope that the Bill can be amended in Committee and strengthened in many ways. We are putting large sums of public money into the railway system and the railway network. I welcome that and support it. The productivity of rail workers is as high as or higher than anywhere else in Europe. The amount of public money that goes in is as high as or higher than anywhere else in Europe. Surely there ought to be greater accountability for what happens to that money.
	Those of us who read the entrails of the railway press see that large sums of money are being made by some of the train operating companies, even when they are receiving large subsidies for the running of their services. The case for public ownership, where appropriate, of the railway network, particularly of the leasing companies and rolling stock, is overwhelming. Retaining in public ownership franchises such as South East Trains is extremely important.
	I agree with my hon. Friend the Member for Hayes and Harlington that the Bill is welcome as a step forward and a stage of improvement. I wish that it went a lot further, however, and I suspect that we will be back here taking it that stage further in a few years' time.
	If anyone thinks that railways are a thing of the past, they should look at a little story that appeared on the front page of yesterday's The Independent on Sunday saying that this country was running out of car parks. That may be the case, but if we continue to promote the car industry and road freight at the expense of rail freight, it will be a problem for all of us. Railways are more efficient and better users of land, as the White Paper's simple picture of a Eurostar train running across the Medway and using only a few square metres of land shows when we look at the space and cost of the motorway running alongside that track, carrying fewer people. We must look to a future that is more sustainable, and railways provide us with that opportunity and future. It is a good public investment to invest in railways and it is an even better public investment to invest in railways and own them at the same time.

Greg Knight: We have had an interesting debate and heard some high-quality contributions from both sides of the House.
	The hon. Member for Luton, North (Mr. Hopkins) said that he hoped the Bill was a step towards the sanity of public ownership. I say to him that this step will never be a staircase. As we and the Ministers know, the reason why is that, to quote the words of the Secretary of State,
	"the principle of public and private partnership is right for the railways, and it will continue. It brings in money from two sources, and that is important."—[Official Report, 19 January 2004; Vol. 416, c. 1078.]
	I fear that the hon. Gentleman's aspirations for the old-style wholesale nationalisation of the railway network will not be fulfilled, whatever happens to the Bill.
	The theme of the speech made by the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) was that railways should contribute more than they currently do. Most of us would agree. He accepted the case for developing the way in which franchises work. We welcome his support for Conservative policy on longer franchises. We feel that longer franchises should be given to train operating companies, but I was disappointed with his conclusion that he intends to support the Bill.
	The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) made an interesting and, as we would expect, informed contribution. She lamented the idea that she was not demonised by Opposition Members, but she is far too sensible and down to earth to be so caricatured. She spoke against bus substitution and expressed fears about loss of expertise in the rolling stock industry. That point struck a chord with Opposition Members and with me in particular, as I formerly represented the seat of Derby, North. I hope that Ministers will heed her comments about expertise in the industry.
	My hon. Friend the Member for Spelthorne (Mr. Wilshire) wants an apology from the Secretary of State on the SRA. The best advice I can give to my hon. Friend is not to hold his breath. He made a powerful speech, and his main concern was that Transport for London and the Mayor have plans to take over rail routes in his constituency. I share his fear that, in the case of the current Mayor of London, consultation would not lead to dialogue, but would be a process of going through the motions before the Mayor continued on his own way in any event.
	My hon. Friend expressed some concerns about safety. I hope and believe that his concerns were unfounded, as I broadly agree with the comments of the hon. Member for Manchester, Blackley (Mr. Stringer) on this subject. Subject to what the Minister has to say under cross-examination in the Standing Committee—if we get that far—I think that the Government are broadly right in seeking to streamline the proposals in that regard.
	The hon. Member for Teignbridge (Richard Younger-Ross), who was courteous enough to say that he could not join us for the winding-up speeches, spoke movingly about the recent accidents. We all take the view that any loss of life is a tragedy that we should take all reasonable steps to prevent. I hope that the Minister will look into the point raised by the hon. Gentleman about the emergency hammers breaking before the windows of the carriages in the recent crash, because we clearly need to examine that matter.
	I cannot say that the hon. Member for Teignbridge took me with him when he suggested that we should fit seat belts to trains. That idea is a non-starter in a mode of transport in which people expect to move around freely and use facilities such as the buffet car or the lavatory in other parts of train. He also mentioned other aspects of safety; those points need to be examined and, as I have said, I hope that the Minister will do so.
	The hon. Members for Knowsley, North and Sefton, East (Mr. Howarth) and for Glasgow, Cathcart (Mr. Harris) supported the Government, which we expected. However, the hon. Member for Knowsley, North and Sefton, East was unfair when he referred to the "sterile debates of the old days". I hope that I shall make it clear—I thought that my hon. Friend the Member for South Suffolk (Mr. Yeo) made it clear—that we support parts of the Bill, which we do not seek to oppose this evening just because it is from a Labour Government.

George Howarth: The right hon. Gentleman will find that my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris) said that, not me.

Greg Knight: I stand corrected.
	My hon. Friend the Member for Poole (Mr. Syms) said that he has always had reservations about the Strategic Rail Authority, and his misgivings have been proved to be right.
	The hon. Member for Glasgow, Cathcart was frank enough to praise the last Conservative Government on passenger transport executives, for which I thank him. He also candidly indicated that he has some reservations about how devolution is working, and I therefore hope that he is one of the hon. Members selected to go on the Standing Committee, so we can explore in further detail the extent of his concerns.
	The hon. Member for Southport (Dr. Pugh) said that he is worried about the future of our railways and mentioned one or two constituency points.
	The hon. Member for Hayes and Harlington (John McDonnell) expressed strong concern about the Government's policy. He showed an independence of mind and spirit, which, I fear, may keep him off the Standing Committee. I hope that I am wrong and that the Whips are brave enough to put a dissenting voice on the Labour Benches, because our deliberations would be enhanced by his presence, which some would say is the true voice of the Labour party.
	In a knowledgeable and compelling speech, my right hon. Friend the Member for North-West Hampshire (Sir George Young) highlighted the hands-on role envisaged in the Bill and the problems that that policy will create. I agreed with every word and he underlined the reasons why we are right to urge the Government to embrace longer franchises. He made an interesting point about clause 6, and I hope that the Minister is prepared to respond to it. What will be the status of the guarantees and loans? Will Network Rail's liabilities end up as part of the public sector borrowing requirement, and if not, why not?
	The hon. Member for Islington, North (Jeremy Corbyn) showed that he is, as Conservative Members would expect, firmly in the Luton, North and Hayes and Harlington camp.

Jeremy Corbyn: It is the red triangle.

Greg Knight: As someone who is interested in classic cars, I have always associated the red triangle with Alvis, which used to make cars in Coventry. On the subject of old cars, I join the hon. Gentleman in paying tribute to our former colleague, Bob Cryer, who campaigned tirelessly for the Settle to Carlisle railway to remain open. That is an epitaph of which he would have been proud.
	The Bill has various objectives, and we certainly do not oppose everything in it, as we have made clear.
	Only two years ago, in 2002, the current team of Ministers promised that the SRA would provide
	"the firm leadership envisaged for it—that of providing strategic direction and funding for the rail industry".
	However, in February this year the Select Committee on Transport reported a completely different story—that the SRA
	"appears utterly incapable of managing significant improvements."
	It also made it clear that
	"the fundamental failure of the railway is one of Government policy."
	Hon. Members may recall that the SRA took over responsibilities from the Office of Passenger Rail Franchising, which my party set up when we were last in Government. My hon. Friend the Member for Spelthorne mentioned the statistics. In 2000–01, that office cost the taxpayer £13 million and employed 187 people. By 2003, the SRA's staffing costs had grown to £102 million, and by 2004 it employed no fewer than 454 people. In operating costs alone, the SRA has cost us all more than £25 million since it was established in 2000.
	Despite costing so much, the SRA has manifestly failed to do its job. The Minister need not just take my word for it; the facts are there to prove it. Train reliability is worse than it was in 1997. Despite this Government's pledge to increase rail usage by 50 per cent. by 2010, only 5.8 per cent. growth has been achieved since 2000. The British Transport police's 2004 annual report showed a 4 per cent. increase in violent crime and a 12 per cent. increase in sexual assaults since 2003. Rail freight has dropped for the past two years, despite a promise by Ministers to increase by 10 per cent. the amount of freight carried. It is therefore hardly surprising that we say that the SRA has been a waste of time and money. It has failed to improve services for passengers and should never have been established in the first place.

Tom Harris: The right hon. Gentleman is being somewhat selective in his choice of statistics. Is it not the case that rail freight has increased by 28 per cent. since 1997?

Greg Knight: The figures that I quoted are correct. If the hon. Gentleman checks, he will find that rail freight has dropped for the past two years.

Tom Harris: I am talking about the past seven years.

Greg Knight: That does not invalidate my point that there is currently a dip, which my hon. Friends and I find very worrying.
	The clear leadership and direction that Labour promised that the SRA would provide has never remotely looked like happening. Therefore, as my hon. Friend the Member for South Suffolk said, we welcome its proposed abolition. The Secretary of State asked why we did not put that in our reasoned amendment. I should tell the Minister—perhaps he can pass it on to the Secretary of State—that when one tables a reasoned amendment, one has to set out reasons why a Bill should not receive a Second Reading; one cannot list parts of it with which one is content. That is why our amendment is silent on that particular issue.
	Our view is that giving more power to politicians is not the way to improve our railways. Likewise, allowing the currently unaccountable Network Rail to have even more control will not improve services. Although we are delighted to see the demise of the SRA, giving more powers to the Department will not help operators to get on with the job of providing a decent and improved rail service. More powers should be given to the train operating companies, which provide the passenger interface, so that they can provide a greater range of services that better meet the needs of travellers. After the political interference that the railways have endured for the past seven years, private industry needs to be given the confidence to invest without further Government meddling.
	I want to comment briefly on rail freight, about which the Bill is strangely silent. With the disappearance of the SRA, no organisation appears to have a statutory obligation to promote or facilitate the growth of rail freight. I ask the Minister whether that is correct. People outside have expressed concerns that, by excluding rail freight from much of the measure, the Government risk leaving freight strategy in a vacuum, with nobody taking responsibility for it.
	The people who contacted me say that if the Bill is enacted in its current form, no official voice will represent freight and fight its corner when network capacity is allocated. Does the Minister accept that the allocation of available capacity to freight and passengers must be assessed fairly and according to value for money and national best interests? The incentive to maximise capacity must surely be equal for freight and passenger services. Their performance should be measured on the amount of freight and passengers they can manage efficiently on the network. No provision attempts to deal with that and I would welcome hearing the reason from the Minister.
	Like the hon. Member for Crewe and Nantwich, I want to comment on rail stock. As hon. Members know, the National Audit Office published a report in February that suggested that new rail rolling stock was being delivered late. It warned that new carriages being introduced into service were less reliable than the old slam-door vehicles that they replaced. Trains not only arrive late at the stations but cannot even arrive from the factory on time. Why should passengers have to put up with old, uncomfortable and sometimes dirty rolling stock while manufacturers take up to two and a half years to deliver new trains? Clearly, people will not use the railways if they are uncomfortable while travelling and feel dirty on arrival at their destination.
	I want briefly to mention access to rail services by disabled people. That point has not been raised in the debate. Although I accept that other legislation is primarily responsible for delivering results on that matter, I would like the Minister to comment on the proposed end date by which all rail vehicles have to be accessible to disabled people. Do the Government have anything new to say about the requirement for improving disability access when rail vehicles are refurbished? Does that happen in every case? The issue is important for many disabled people who would like to travel by rail but currently cannot do so in safety.
	I want to ask the Minister several questions. Clauses 22 to 44—22 provisions—deal with closures. They do not refer to the relevant lines but to the passenger services on them. The Bill includes nothing about what happens to the lines after a service is terminated. If a line currently carries freight or might do so in future, surely it should be kept open, at least for a time, to ascertain whether others want to increase the services or other companies wish to take up and run passenger services. Does the Minister agree?
	Schedule 4 covers the Secretary of State's power to determine the scope and size of the network. There is some concern about its wording, especially proposed new paragraph 1G. It has been suggested that the provision might allow the Secretary of State, in determining the scope and scale of the network, to override private sector contracts, contrary to his undertakings. I do not believe that that is possible or in the Minister's mind but I would welcome an answer to that point.
	In opening the debate, the Secretary of State said that he intended to consult about safety. Will the Minister tell us when he expects the consultations to be concluded? The Secretary of State also referred to the desirable aim of getting track and train companies to work ever closer together but went on to say that the Bill does not provide for that. Will the Minister regularly update the House on progress, perhaps through a periodic written statement?
	On the provisions relating to London, and to giving powers to the current Mayor, I should like to reiterate something that my hon. Friend the Member for South Suffolk said earlier; we do not support these provisions. Two thirds of all train journeys arrive in or pass through London, leaving millions of passengers from outside the capital facing possible interference by the Mayor in their train services. For example, in an election year, it might suit the Mayor of London—whoever he is—to require a fast, non-stop train to halt at the edge of London to pick up mayoral voters. Passengers might also find their fares being increased to pay for increased expenditure on other services authorised by the Mayor. These are not fanciful concerns. The Bill says:
	"A reference to a London railway passenger service is a reference to . . . a service for the carriage of passengers by railway between places in Greater London and places outside Greater London."
	In our view, that drafting is far too vague. Will the Minister consent to look at it again in Committee, with a view to tightening it up?
	We have heard about only part of the Government's transport policy in this debate. The Secretary of State likes to put himself forward as a benign, friendly, white- haired gentleman—[Hon. Members: "He's Santa!"] I would not call him Santa, although that is certainly a gentleman we think of at this time of year. The House should remember, however, what the hon. Member for Pontypridd (Dr. Howells) said earlier this year. I notice that, following his remarks, that particular Minister has now been shunted off into the sidings in another Department. He said that the only way to end Britain's love affair with the car and to get people to use public transport was to
	"tax people out of their cars in the same way as the authorities have tried to tax people off cigarettes."
	That is the real Labour transport policy. The Government want to use taxation as a weapon to make one form of transport unaffordable, so that people have no choice but to take the train. We believe that it is far better to improve rail services, so that those who can complete their journey by rail actually want to do so. Labour's high-tax transport policy is a kick in the teeth for poor rural families and pensioners, for whom there are no rail services for their essential journeys.
	Overall, this is a bad Bill, but it is not completely without merit. We support the abolition of the SRA and the streamlining of health and safety issues. However, in supporting those proposals, we do not have to accept the vehicle of this Bill. That is why we commend the reasoned amendment to the House.

Tony McNulty: This long and interesting debate on the future of rail is long overdue. The right hon. Member for East Yorkshire (Mr. Knight) summed up the Opposition's position when he condemned the Bill as being a bad Bill, but not completely without merit. That is roughly where the Conservatives came in, with similar views being expressed by the hon. Member for South Suffolk (Mr. Yeo).
	I thought that the right hon. Member for East Yorkshire was going to pre-empt me when he said that the Secretary of State had revealed only part of our strategy. That much he got right, but he then went on to give his little rhetorical political rant, which did him no service at all. He was right to say that the Bill does not, and cannot, incorporate all the elements in the White Paper published in July. Many of those elements do not need legislation, and the Bill needs to be considered in that broader context. So I half accept the point that he half made.
	Of course we should more readily apprise people of the fact that we are introducing the Bill in the context of a whole range of things happening in each area, many   of which are already in the public domain. Subsequently, as with so much legislation these days, a whole raft of guidance and regulations will flow from the Bill, and I am happy to undertake—as I did last year with the Traffic Management Bill—to ensure that, if we can, we will make available at least the headlines and drafts of those instruments that explain further what is in the Bill, albeit in the wider non-legislative context, to Committee members at the earliest opportunity.
	It is important to understand—some Members may not have understood it entirely, not that I blame them—where the Bill and each part of it sit in a wider domain. Let me establish the policy backdrop. It is easy to characterise the rail network as all doom and gloom, and to suggest that everything is as terrible as it was 20 or 30 years ago because the system has been starved of investment. I do not deny that there are problems—if there were not, there would be no need for a Bill—but we are starting from a fairly robust position. I agree with those who have said that we can have a degree of confidence about the future of rail.
	When I took over the rail portfolio barely a couple of weeks ago, I said that this was an exciting and interesting time at which to be a rail Minister, and I meant it. Had I said that five or 10 years ago, the white coats of the former right hon. Member for Huntingdon would have come flapping over the horizon, or I would have been quietly taken out of the back door and shot; but it is an interesting time, and it is incumbent on us all to recognise that that is our starting point. Over the past 10 years, our rail network has experienced more significant growth than any other European network, and I would venture to say that once the Bill is implemented, Britain's railways will be in a far better shape than any of their European counterparts.
	I do not say that lightly. I know that Members may jump up and tell me how wonderful the French TGV network is, but let them try to travel from one French coast to the other without it. It may be the jewel in the crown, but we should look behind it at the rest of the network. Those who talk of the paucity of the rural network here should go to parts of Germany, France and Spain.
	We have concluded that the SRA has had its day, but not on the basis that for four years it was a complete and utter waste of time and achieved nothing, and the sooner it goes the better. That would traduce the contribution of many who have worked in the SRA, and will continue to work in the rail industry in some capacity. It is nonsense to suggest that because 400 or 500 employees are part of a monster called the SRA they are not making a professional contribution in the same way as workers in the wider industry. It could be said, to an extent, that we are only able to improve our public policy contribution to the railways because of the SRA's good work. If that constituted a bridge from the immediate aftermath of the botched privatisation, what we are now building is a bridge to where the system is all the more efficient—a point at which we can drive costs down all the more readily.
	Every key part of the Bill relates to non-legislative elements that should be understood and put in context. The early clauses relate to the SRA's demise, and at the time of First Reading we put in the public domain what we sought to do and what the DFT rail unit would look like. It is a travesty, and not terribly intelligent, to use the generic term "civil servants" as a term of abuse. Many people working in the DFT have been there for at least 30 years, and have served the rail industry in various ways for a long time. I do not think it very clever to reduce every civil servant to an interfering bureaucrat.
	As we have made clear, the new DFT rail unit will consist of people from the current rail unit and people from the SRA. Whatever Members think of the relevant clause, they should understand that developments are taking place that are not included in the Bill.
	It is important, too, to understand that a range of working parties and transitional bodies are taking forward work on safety regulation and on economic regulation, necessarily taking account of the elements in the Bill. However, many other aspects are not in the Bill. For example, in terms of safety regulation, we are working through how all the staff involved in rail safety at the Health and Safety Executive will transfer to ORR. There are still some general concerns under the Health and Safety at Work etc. Act 1974 that HSE will be obliged to continue. There will be a need for a memorandum of understanding between HSE and ORR in that regard. Where there are memorandums of understanding and other elements that link the non-legislative and the legislative processes, it is important that we try to put those in the public domain.
	There has been extensive talk in Scotland, Wales, the PTEs and London about how to take all those aspects forward. As my right hon. Friend the Secretary of State suggested, in some areas, many of the elements are in place now. Transfer can take place far more readily in the Scottish example than in the Welsh, London or PTE examples.

George Howarth: The Minister was present when I discussed some of the developments that have been achieved on Merseyside by the PTE there, which is known as Merseytravel. Perhaps he can comment on those points and on what successes it has had.

Tony McNulty: I will certainly try to return to Merseytravel in a moment. I want to pick up on many of the points that hon. Members have made. [Interruption.] It is called an introduction.
	There has been discussion with the RPCs, much of it at their instigation, about what the passenger voice will be like after this Bill. Those elements do not necessarily or absolutely have to be part of the Bill, but the demise of the RPCs clearly has to be.
	In terms of network modifications, many of the extensive clauses—I accept that there are 22 clauses on this—are about the system post the Railways Bill. There are so many because the SRA and the RPC were central to the entire closure process up to now. We must put that in the context of devolution and ensure that everyone who needs a voice has a voice. The same is true in terms of bus franchising. I stress that any number of elements in the rail review White Paper are not part of the Bill and do not require legislation. It all needs to be seen in that context.
	For example, to sum it up, the right hon. Member for East Yorkshire said that no one is doing rail freight. The Department will do the rail freight strategy. There is no need for a statutory duty in order for us to perform the function. The ORR already has a duty under the Railways Act 1993 to promote use of the network by freight. The Freight Transport Association broadly welcomed the White Paper proposals, not simply the Bill. We are working with that organisation and others that have a stake in freight to get to a stage where there is certainty on freight and its use of the network. Further expansion of freight on the network is far more guaranteed than it has been.
	My hon. Friend the Member for Islington, North (Jeremy Corbyn) talked about bustitution of rural lines. There may be some residual notional bustitution of rural lines, but the bustitution—it is a horrible word—clause refers specifically to PTEs. PTEs are overwhelmingly urban. However, I accept that West Yorkshire and South Yorkshire will have rural lines and not just urban lines. The quality contract legislation certainly applies to the PTE areas.

Jeremy Corbyn: Can the Minister assure me and the House that the community rail idea is about the retention, development and increased use of branch lines and not a Trojan horse for their closure à la Beeching?

Tony McNulty: I can give my hon. Friend that assurance. It is slightly different from bus substitution, but the community rail partnership strategy that we launched with the SRA just the other week could not be further from a Trojan horse or "Dr. Beeching 2". There are plenty examples of lines opening in a voluntary capacity. They have stayed open and become more viable, transforming themselves from branch lines to feeder lines to the rest of the network.
	Penistone is a key example of that. I was there on a cold and windy day, and it does get very cold and windy up there. That line has gone from what was disparagingly described as a community, fluffy, beards-and-anoraks line—with all due regard to my hon. Friend the Member for Islington, North—to feeding 500,000-plus passengers a year into the trans-Pennine express network.

Jeremy Corbyn: What anorak?

Tony McNulty: I apologise for the anorak element of my comment.
	That arrangement works so well because all the key interested parties are involved. Local authorities, community groups and others took the view that they wanted the line to stay open.
	My hon. Friend also spoke about the east London line extension and those elements that the Mayor will take forward. Again, before I deal with the point about devolution of power, much of what the Mayor can do within London is because of the almost £3 billion line of credit that he has been given through prudential borrowing. That is outwith the Bill and has nothing to do with it. However, it gives mid-term, if not longer-term, certainty to many of the schemes within London and will, finally, give Hackney a tube station.
	My hon. Friend mentioned the east-west rail line. Again, the Office of the Deputy Prime Minister and the Department for Transport are talking to local authorities and private sector companies to see how they can push that link on. We have made it clear that there is not a substantive economic case in terms of its being additional to our plans for the network. It is perfectly in order, however, for us, the ODPM and others to consider how that part of the loop can be fixed by working with the private sector, but those who most directly benefit from it should contribute to it. It is terribly short-sighted of the hon. Member for South Suffolk to say that because the Bill relates to Ken Livingstone, he does not want it. All the Bill does is to extend to London areas of influence and policy that the PTEs already have.
	To the extent that it says anything, the reasoned amendment says that the Bill
	"increases the extent to which politicians and civil servants interfere in the running of the railways".
	We like to call that public accountability, when politicians have a role to play. It is the public's money and there should be public accountability here.
	I could not for the life of me understand what the hon. Gentleman was going to do. Having agreed the demise of the SRA, who was going to make decisions on franchising? It seemed that he was going to get the transport operating companies that want to run the franchises to do the analysis and let the franchises. All he said was: more power to the TOCs. Perhaps we should cut out everyone else, give them the money and let them do whatever they want, but that would do nothing for public accountability.
	The reasoned amendment is also against giving
	"the Mayor of London power over train services which begin or end beyond boundaries of the Greater London Authority."
	It does not say why. There was not much illumination of that in the hon. Gentleman's contribution. Given that so much of intra-London travel is on the heavy rail network, it must be right that we move down the road initially of looking at the discrete services in London and at a role for TFL within that process. I do not understand how anyone could object to that in any way, shape or form.

John Horam: Will the Minister give way?

Tony McNulty: With the greatest will in the world, the hon. Gentleman has only just popped in, for which I am grateful. However, he was not here for the debate, so I shall not bother to trouble him for a contribution.
	If we go further with London powers, it is appropriate that someone from the surrounding regions sits on TFL's board, but that is again way outside the Bill's remit and we are a long way from that process. As has been suggested, the Silverlink metro lines will be considered first in that regard, and all but about three miles of track to the north of my constituency are within the Greater London Authority area. It must therefore be right to start to examine those configurations, not only in that context but in the passenger transport executives.
	Many of the points made by the hon. Member for South Suffolk simply do not stack up. Apparently, we are seeking to perpetuate instability in the rail industry with regard to franchising. As to why, he was not forthcoming, and neither were any of his colleagues, apart from giving us the hoary old chestnut that there should be longer franchises. How long should they be? There was no suggestion. Should it be 20, 30 or 50 years? Perhaps we could go into Nicholas Ridley fantasy land, have the House of Commons meeting merely once a decade, give up all the contracts and franchises, and all go down the pub. That did not work terribly well for local government, it will not work well for central Government, and it is completely devoid of substantive consultation and public accountability, which must be the order of the day. Some serious points were raised which were specific to the Bill, some of which will be explored further in Committee. I stress that some of the answers lie outside the scope of the Bill, and I will undertake to keep Committee members, and if it is wanted, the House, fully involved.
	The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) referred to whether there should be a duty on the Office of Rail Regulation in relation to environmental matters. I am happy to tell him that that is already exercised in its functions. Under the Railways Act 1993, it must have regard to the effect on the environment of activities connected with the provision of railway services.
	The hon. Member for South Suffolk spoke about the relationship between the Office of Rail Regulation and the Secretary of State. That is an important point—the Bill does not simply reach into contours and leave everything much as it was. Every relationship in the Railways Bill changes. The relationship between the ORR and the Secretary of State will therefore change. The new relationship will maintain the independence of the ORR.
	In relation to the point that existing contracts will be overridden, that is simply not the case. The ORR is obliged to review its position at times, but that is not about having a blanket power to override all existing franchises and contracts. It cannot be retrospective in that regard.
	My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who chairs the Select Committee, made good points about ROSCOs and rolling stock. The issue should not simply be considered in the context of the existing skills base in this country, but I remind her that more than 75 per cent. of new rolling stock is British-made, and it is incumbent on all rolling stock companies, particularly British ones, to ensure that they can react to the pressure down on costs that we are seeking to get into the system. She and other Members raised the conundrum whereby a load of new rolling stock is on a railway line, and there is at least some hiatus while it is run in before getting back to the performance levels promised in the first place, which needs to be considered. Outside the Bill, we are reviewing the whole position of ROSCOs, and we are considering efficacy and efficiency on a company-by-company basis. I take the point, however, about losing job expertise in relation to rolling stock, and about ROSCOs' relationship with people more generally.
	My hon. Friend the Member for Crewe and Nantwich also made a point about safety, and I reassure her that safety will not be compromised by cost considerations in relation to the change to the Office of Rail Regulation. Safety remains paramount, and all the expertise moving through the ORR, which is embedded in and an integral part of all the other considerations, including economic and broader policy, must still have safety at its core. That is an absolute imperative, given all the lessons that we have learned.
	The right hon. Member for East Yorkshire (Mr. Knight) said that it is a shame that Network Rail is being given timetabling powers. I am afraid that Network Rail already has such powers; indeed, it is the lead body in consulting with the rest of the industry. Other Members made a number of points, some of which were slightly confused, about the passenger transport executives. Some Members were responding to the White Paper rather than to the Bill's substance; these issues will doubtless be explored further in Committee. It is clear that PTEs must, and will, have an expansive role not just in rail, but in all other transport provision in their areas. I agree with my hon. Friend the Member for Knowsley, North and Sefton, East (Mr.   Howarth) that in many cases PTEs have been very strong advertisements for public transport networks, ensuring that all regions get the networks that they deserve. That said, by contrast with the situation in past years, we must ensure that we make optimal use of our railways throughout the system, and at a realistic cost.
	On the consultation process, which was mentioned by a number of Members, it is entirely appropriate to look at how the Gatwick Express works with the Brighton commuter line, although we should not determine such matters at this stage. It cannot be right that the Gatwick Express is at best 50 per cent. full at peak times, when the corresponding commuter service is 130 per cent. full. I am not pre-judging the outcome of such consultation, but it is at least worth looking at how those two different services interact with each other.
	What did we get from the hon. Member for South Suffolk? The answer is, not a lot. His greatest scheme at the minute seems to be flogging off as much Network Rail land as possible. He said on the radio this morning—thereby spoiling my breakfast—that going down that route would unlock hundreds of millions of pounds. In essence, he has missed the boat—if I may mix transport metaphors—in that much of the non-operational land previously owned by British Rail went not to Network Rail but to BRB (Residuary) Ltd. Much of what Network Rail has, in operational terms, it needs.
	I will go half way towards the hon. Gentleman. I have explored this issue over the past couple of months and there are developments—such as major termini in London and elsewhere—that Network Rail could take on far more readily. We are already exploring such ideas and we are grateful for the hon. Gentleman's support. However, 794 of the 800-odd sites of British Railways Board land are worth less than £50,000, so quite how the hon. Gentleman is going to construct a major, integrated Tory transport policy on the back of sites worth less than £50,000 I simply do not know.
	I hope that the real issues that I have not had time to deal with will be explored in some detail in Committee. The relationship between the Bill's four or five key areas, devolution, economic and safety regulation and the demise of the SRA are matters worth exploring, and I hope that we will do so, should Second Reading be secured tonight. But what we cannot have is this empty vacuum from the Opposition.

Peter Luff: As opposed to a full vacuum?

Tony McNulty: We cannot have this vacuum from the Opposition, which offers nothing to the people of this country. Our rail network now carries more than 1 billion passengers and is the most efficient that it has been, in terms of passenger miles covered, since the early 1960s. Our task is to make it all the more efficient, and that is what the Bill will do. I commend it to the House.

Question put, That the amendment be made:—
	The House divided: Ayes 124, Noes 321.

Question accordingly negatived.
	Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading), and agreed to.
	Bill accordingly read a Second Time.

RAILWAYS BILL (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6),
	That the following provisions shall apply to the Railways Bill.
	Committal
	1. The Bill shall be committed to a Standing Committee.
	Proceedings in Standing Committee
	2.   Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 18th January 2005.
	3.   The Standing Committee shall have leave to sit twice on the first day on which it meets.
	Consideration and Third Reading
	4.  Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
	5.   Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
	Programming Committee
	6.   Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
	Programming of proceedings
	7.  Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—[Mr. Ainger.]
	The House divided: Ayes 312, Noes 131.

Question accordingly agreed to.

RAILWAYS BILL [MONEY]

Queen's recommendation having been signified—
	Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a), (Money resolutions and ways and means resolutions in connection with Bills),
	That, for the purposes of any Act resulting from the Railways Bill, it is expedient to authorise the payment out of money provided by Parliament of—
	(a) any expenditure incurred by the Secretary of State for or in connection with the carrying out of any of his functions under that Act; and
	(b) any increase attributable to that Act in the sums which are payable out of money so provided under any other Act.—[Mr. Ainger.]
	Question agreed to.

RAILWAYS BILL [WAYS AND MEANS]

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with Bills),
	That, for the purpose of any Act resulting from the Railways Bill, it is expedient to authorise—
	(a) the imposition of charges to corporation tax by provisions relating to transfer schemes; and
	(b) the payment of sums into the Consolidated Fund.—[Mr. Ainger.]
	Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

Services of general interest

That this House takes note of European Union Documents No. 9824/03, Commission Green Paper on Services of General Interest, No. 7549/04, Commission Staff Working Paper; Report on Public Consultation on the Green Paper on Services of General Interest, and No. 9643/04, Commission Communication, White Paper on Services of General Interest; welcomes the debate on Services of General Interest and supports the Government's view that, at a European Union level, sector-specific regulation continues to provide a more satisfactory approach than a horizontal framework directive on Services of General Interest.—[Mr. Ainger.]
	Question agreed to.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

European satellite radionavigation programme

That this House takes note of European Union documents Nos. 9941/04, 11834/04 and 13300/04 and the unnumbered Explanatory Memorandum dated 26th May 2004 from the Foreign and Commonwealth Office, relating to the European satellite radionavigation programme (Galileo); endorses the Government's support for the draft Conclusions on the deployment and operational phases of the European Global Navigation Satellite System programmes for the Transport Council on 10th December 2004; and supports the Government's wider aims in seeking a lead role in the Galileo programme.—[Mr. Ainger.]
	Question agreed to.

ESTIMATES

Motion made, and Question put forthwith, pursuant to Standing Order No. 145 (Liaison Committee),
	That this House agrees with the Report [2nd December] of the Liaison Committee.—[Mr. Ainger.]
	Question agreed to.

TAX LAW REWRITE BILLS

Ordered,
	That Mr Chris Pond be discharged from the Joint Committee on Tax Law Rewrite Bills and Mr Ivan Henderson be added.—[Mr. McWilliam, on behalf of the Committee of Selection.]

PRIVATE FINANCE INITIATIVE (EDUCATION)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]

Vincent Cable: I am grateful to have the opportunity to introduce a debate on the private finance initiative in schools, particularly on a matter that is directly relevant to my constituency—the problems encountered by Jarvis, the contractor, and the impact that that is having on a primary school PFI. I shall speak on that rather narrow subject, rather than on the broad philosophical issues.
	There are three questions that I shall pose. First, given the extreme difficulties of finishing a PFI contract with a company that has enormous liquidity problems and may face bankruptcy, what happens to discharge the contractual obligations? Secondly, what can be done to head off a bankruptcy—a situation that affects many constituencies and many PFI contracts? Thirdly, in the longer term, how can contracts be better designed so as to deal with such a contingency?
	I am posing those questions to the Minister, although I recognise that in the short run and most directly, we are dealing with a contractual relationship between a local education authority and a company. It is that relationship that is coming under stress, but this is also clearly a matter for the Government, as it is they who designed and approved the general framework of PFI contracts. As far as I am aware, they have been giving good advice to my local education authority throughout its current difficulties.
	The Government have a key role, as they have a bird's eye view of a broad problem. I understand that Jarvis is having considerable difficulties with many of its contracts. In the schools sector and further and higher education, a process is taking place in which cash is being switched from one project to another, and the Government are in many ways in a better position than the local authority to make judgments on how to manage this critical situation.
	Before I embark on giving a little more detail about the problem that we have, I stress that I do not want to deliver any general ideological tirade about PFIs. I have a pragmatic view of the issue, both in relation to the education sector and more generally. In the education sector, all three major parties in my borough have their fingerprints on the contract in question. A Liberal Democrat council was in power in 1997, and it had had almost a decade and a half of frustration in which it was unable to invest anything in schools. When the new Government came in with their PFIs, the council jumped on them with considerable enthusiasm and had its programme approved by the Government. We have since had a Conservative council, which is taking the matter forward and has indeed proposed a PFI project for the secondary sector. All three parties are involved in, have supported or are complicit in the arrangement, so there are no party political points to be made out of it.
	More generally, my constituency has seen a cross-section of PFI projects of different types demonstrating the costs, benefits, risks and opportunities of this type of financing. My local district general hospital, the West Middlesex, was one of the early second stage projects. It has now been completed, and it was completed on time and within budget, and with an imaginative design. It has also had quite of lot of snagging problems and there are questions about value for money, but broadly speaking, the perception is positive.
	We have also had one of the major PFI projects coming through the Department of Trade and Industry in the rebuilding of the National Physical Laboratory. What happened there again illustrated the costs and benefits of the PFI system. The major contractor, one of the McAlpine group, went bankrupt halfway through the project. It was delayed for a couple of years, but the costs have been borne by shareholders and not by taxpayers, which is what PFIs are designed to accomplish. I have a broadly positive view of the issue, and in no sense a doctrinaire view.
	The Richmond primary school contract was worth roughly £50 million over a 30-year period. In terms of education and Department for Education and Skills PFI projects as a whole, the project is fairly small beer. Until roughly a year ago, when I last saw the figures, there were about 93 education PFI projects out of 568 such projects altogether, and they accounted for about £1.85 billion out of £35 billion worth of total PFI investment. The Richmond project was only about 3 per cent. of the total education PFI, so it is fairly modest in scale, but it is not trivial, and it gives some important lessons.
	The Jarvis contract for six schools on seven sites was due to be completed in summer this year, and for the most part, it was. Indeed, I have visited all the new PFI schools in my constituency, and most of the projects have been very successful. They have been well designed, imaginative and well received by the schools and their governors. They have been opened and the overall reception is broadly positive. Some niggles have occurred, such as quite serious snagging problems, small loose ends that have not been completed and problems with the maintenance contract. At Education questions, indeed, I have asked the Minister about the complexities of maintenance contracts. Why can we not have simpler standardised maintenance contracts across boroughs, rather than reinventing the wheel on every occasion?
	The big problem is that one school was left half completed when Jarvis's financial difficulties struck. I have been keeping in fairly close touch with that school, which I visited two weeks ago. The position is frustrating because 90 to 95 per cent. of the work was completed three months ago, but large parts of the school are simply unusable because minor works are incomplete. For example, a new kitchen cannot be used because the cooker has not been connected, a disabled lift cannot be used because no one has been in to check it, and the school hall needs a final coat of varnish. Such minor problems could have been addressed in a few days by concentrated, focused construction work, but the work has been left for months, and there is no prospect of its being dealt with.
	I shall read out a letter sent to me by the school council on the occasion of my visit, which graphically expresses what the children see. The children use quite balanced language, but the letter captures the flavour of the situation:
	"We are very proud of our school and are very excited about some of the rebuilding that has taken place and also some of the new equipment which has been provided. However, we are at the same time extremely upset that the building seems to have come to an end before it has been properly finished . . . Take a look at our playground . . . It still looks like a builder's yard. The ground in some places is appalling and lots of people have fallen over and hurt themselves . . . The water fountains dribble a lot and you can't drink from them . . . Jarvis are making little progress and are not sticking to their promises. We are very pleased with our classrooms, which are really good with the interactive white boards and the computers. But, we are very angry with Jarvis and we will not rest until it is done!"
	The picture is balanced, but there is a great deal of frustration that a modest amount of work simply cannot be completed because of the contractual nature of the financial problems involved.
	There are essentially two difficulties. First, there is the cash-flow problem. Jarvis has extreme difficulties in realising cash. It is reluctant to hand out cash to its subcontractors, who turn up on the site and cannot get on with the work—even small amounts of work that require a few hours of a technician's time. The second problem, which partly relates to the first problem, is that because Jarvis's PFI building work is collapsing across the country, there has been a major haemorrhage of construction management staff, so it simply does not have people to carry through the work. The work is not being completed because of a combination of the shortage of people and extreme cash-flow difficulties.
	Where do we go from here? The first line of responsibility rests with the local education authority. I know that the LEA is negotiating with Jarvis and the other partners to the PFI vehicle, and I hope that it is successful. As I understand it, however, the PFI negotiations arising from Jarvis's difficulty have been going on for about three months. I have been told—I am not sure whether this is correct—that little is likely to happen before the company's full restructuring is complete, and I am not wildly optimistic that that route will succeed, although I hope for the best. I also understand that the local authority is imposing contract penalties for delays on Jarvis, but the obvious problem is that if a company has severe liquidity problems and councils around the country are imposing penalties, its financial difficulties will become even more serious, which will make it even more difficult to complete the work.
	Do the Government have oversight of that problem? I am aware of their involvement in the basic concept for the contracts and giving advice. Will the Minister give us a feel for the problems across the country resulting from Jarvis's difficulties? Are the Government taking a proactive role in trying to manage the process or are they stepping back and allowing the LEAs to deal with it as best they can? As I have said from the outset, I can see an obvious disadvantage in allowing LEAs to manage the situation on their own: because the company can switch cash from one project to another, there will be no oversight of its problems and no sense of prioritisation. Perhaps the Government can help with that matter.
	As I come to the end of my remarks, I want to ask a hypothetical question that I do not expect the Minister to answer directly: what would happen were Jarvis to collapse completely? I believe that it has until March to complete its restructuring; it may fail. If a major PFI contractor effectively becomes bankrupt, what happens to the many projects that it is required to manage, including those in my constituency? As I understand the contractual arrangements, the banks and other parties to the PFI contract would assume responsibility, and would have a self-interest in ensuring that the project is completed, because they would then be able to sell the contract on—for profit, one hopes. It is therefore in their interests to ensure that everything is eventually sorted out.
	The problem is one of time and delay. One of the key lessons of this experience—the Minister may wish to reflect on it—is that however well designed PFI contracts may be in getting a proper balance of risk between the different parties, what is lacking is any sense of urgency when there is an extreme liquidity problem such as that which exists in this case—or would exist in the case of the potential collapse of a contract. I question whether it is possible in the longer term to redesign PFI contracts to allow more active and rapid intervention in such a position of force majeure.
	In conclusion, I shall read what the Government themselves said in their helpful report, "Building Schools for the Future", which anticipated PFI work predominantly in the secondary sector and made a balanced appraisal of it. It states:
	"We know from our own information and the recent Audit Commission study that the earliest PFI schemes did not all deliver fully on this vision. We also know that while some local authorities and schools have been delighted with the PFI investment in their areas, others have found it difficult to translate their education vision into suitably flexible contractual terms."
	In my borough we have a very good example of a major problem erupting in a PFI contract that was not anticipated and is very difficult to manage. What lessons have the Government learned from the situation, can they help to resolve it, and have they learned any wider lessons about how PFI contracts can be better structured to avoid such difficulties in future?

David Miliband: I welcome this debate and congratulate the hon. Member for Twickenham (Dr. Cable) on securing it and on the balanced way in which he tried to deal with the issues nationally as well as in terms of their effect on his constituency.
	I think that the hon. Gentleman would agree that, over the past 10 years or so, the private finance initiative has developed into a strategy for genuine public-private partnership and that that has been a significant development, if not without its difficulties, which I shall try to address. I welcome the opportunity to set out the Government's position.
	It is fair to say that, in the mid-1990s, the private finance initiative was conceived, at least in significant part, as a replacement for public investment. Some saw it as a free lunch—private money supporting national infrastructure. As the hon. Gentleman knows, there is no such thing as a free lunch and, since 1997, the Government have tried to fashion a programme that uses private finance to supplement public investment, not to replace it; that mobilises private sector expertise and experience to serve the public interest; and that sets the incentives for the public and private sectors to serve the interests of taxpayers and citizens.
	The schools example is instructive in that respect. In 1996–97, public investment in the schools infrastructure totalled some £700 million. Next year, in 2005–06, it will be more than £5 billion, with 75 per cent. of it provided conventionally and 25 per cent. in the form of PFI credit. The hon. Gentleman mentioned the "Building Schools for the Future" programme. That is worth more than £2 billion a year, about half of which will be PFI and half conventional procurement.
	Over seven years, more than £7 billion has gone into school repairs, helping schools around the country. The   conception of public-private partnership—PPP—fundamentally changed key aspects of the relationship between the public and private sectors. At the heart of that shift is the idea of the public sector as an intelligent customer of private services. The Government have had a commitment to use public-private partnerships, including projects that were procured under the PFI, to improve the standard of school buildings, as a matter of pragmatism—I believe that the hon. Gentleman used that word—not ideology.
	Such action transforms Departments, agencies and local authorities from being simply the owners and operators of assets into the purchasers of services. The public sector is required critically to examine the full cost of owning an asset throughout its life, not only the initial cost of buying it. That also changes the way in which the private sector thinks about providing the assets. Private firms become long-term providers of services rather than simply asset builders. The private sector can no longer simply walk away from the buildings once they are built.
	I believe that the hon. Gentleman acknowledges that the local authority is the key partner of the private sector in the schools sector. The local authority advertises, negotiates and signs the contract and is subsequently responsible for operating the contract over its life. Local authorities determine whether to undertake a PFI project. However, we recognise that the contracts are long term and therefore different from conventional procurement projects. The Department for Education and Skills and the Treasury have provided and continue to provide substantial support to local authorities that undertake those projects. We also monitor the PFI projects throughout the country.
	The public-private partnerships enable the public sector to use private sector resources to deliver elements of services that the latter, through its skills and expertise, is best placed to provide through a structure in which the private sector puts its capital at risk so that it is paid only when it delivers. I understand that, in the case that the hon. Gentleman raised, delivery has not happened and shortly I want to deal with those circumstances and the sanctions that the public sector has at its disposal when the private sector does not deliver.
	The structure of risk transfer gives the private sector powerful incentives to innovate, and especially to deliver projects on time and to budget, to manage risks more effectively, to maintain assets and provide the specified quality of service for the length of the contract. It is striking that almost 90 per cent. of PFI projects are delivered on time, while under traditional procurement methods, 70 per cent. of projects came in late. Of course, there are benefits to customers, users and taxpayers but they cannot and should not be bought at any price. We, as the public sector, must ensure that when we enter into long-term contracts, we continue to receive value for money for the project's duration.
	The Government's approach is that the PFI should be used only when it can deliver value for money, which cannot be secured at the expense of the terms and conditions of the work force or good design. We are committed to ensuring a level playing field between different procurement routes and we are clear that value for money should be the only criterion that is used to choose between them.
	The total cost of the asset over its life is key to assessing the value for money of a PFI project. That is good public sector practice, whether spending under conventional procurement methods or the PFI. The cost includes the essential services that are required to maintain the asset's value, such as maintenance and repair. In the past, those costs were often excluded from investment appraisals, with the result that opportunities to invest in the design of the building to prevent later maintenance expenditure were overlooked and assets not properly maintained.
	In contrast, at the end of a PFI contract—typically, 25 years—the school is returned to the local authority or governing body, fit for further use. In addition to analysing the whole life cost of the asset, through the appropriate allocation of risk, the PFI ensures that the private sector partner has strong incentives to deliver the services that the public sector requires.
	In PFI projects, the private sector does not get paid until the building is complete and the services are being delivered at the required level. Under PFI, the public sector is guaranteed the specified service. If that is not provided, financial penalties result.
	The hon. Gentleman accurately cited figures for the number of PFI projects that are either open or in train. In 40 schemes, pupils, teachers and head teachers are receiving services. We are trying to learn the lessons of improving procurement and management of PFI projects by local authorities. That is especially important, as our investment in the school estate increases, to ensure that every pound spent is well spent. The hon. Gentleman mentioned the lessons that have been learned in the past five to 10 years. Lessons are being learned on organising contracts, the need to bear down on legal and contracting expenses, the importance of high competence on the public sector side of the negotiating table in putting the contracts together and the need to ensure protection of public money.
	The hon. Gentleman also referred to the importance of standardising contracts, or at least of having standard contracts. He will be pleased to hear that, to aid the process of contracting, we recently issued standards for schools' PFI contracts, to help local authorities coming to the negotiating table to finalise such deals.
	Given the hon. Gentleman's description of events, it would obviously be wrong of me to pretend that everything always goes right in PFI projects, just as it would be wrong to pretend that things always go right in conventional procurement projects. We can make the case, however, that the public sector has stronger sanctions in relation to PFI projects than it does under conventional spend. PFI contracts have contingencies built into them to ensure that, when things do go wrong, either they are put right, or the private sector faces a financial penalty.
	In most PFI contracts, there is more than one shareholder and, critically, a backing group of lending banks with the financial resources to deal with a situation in which a party to the contract has financial difficulties. For PFI contracts in construction, in the event of a construction company being unable to fulfil its responsibilities, it is the responsibility of the banks and other shareholders to replace the contractor with another firm. The cost of doing so will fall on the consortium. If it fails to meet that cost, the procuring authority can terminate the contract, at a significant cost to the consortium.
	If a building contractor encounters serious difficulties, there will be inevitable problems in the procurement of the project, whatever procurement method has been used. In PFI contracts, however, mechanisms are in place to ensure that the banks and shareholders have strong incentives to remedy the situation. It is important to draw a contrast between this and conventional procurement, in which the public sector would be left without such a safeguard. At the end of the day, if everything else fails, the local authority has the final sanction of terminating the contract and providing the services itself.
	As we know, a number of projects are in difficulty as a result of the widely publicised financial problems of Jarvis. I am sure that the hon. Gentleman realises that it would be wholly inappropriate for me to comment on the situation relating to that company. I can, however, comment on the situation in Richmond, and on the Trafalgar school in particular. As he said, the scheme in Richmond involves six fully serviced primary schools through a single contract. He was also right to say that a £50 million project is on the small side when it comes to PFI deals. The contract is for two new schools and four expanded and remodelled schools, and was signed in June 2002. I understand that, in the main, construction work has been completed at four of the six schools.
	A note that I have here tells me that high-quality information and communications technology specification has been a particular feature of this contract, along with flexible classrooms and improved community assets, and that the use of interactive whiteboard technology is having a special impact on the learning experience of the young people involved. That is obviously good to hear. In addition, the working environment for pupils and staff has been much improved.
	However, at the Trafalgar infant and junior schools, a number of items of work, including on the kitchens and the external landscaping, have still to be finished. They have been delayed for some time, and some of the resulting difficulties were brought home to us by the pupils' description of this unacceptable situation through their school council. While the schools might be able to occupy their new buildings, it is obviously unacceptable that they cannot use facilities such as the outdoor play area or the kitchen as they would like to.
	The contract that the authority signed with Jarvis has clauses to cover non-performance and it is up to the authority to invoke those terms. It has, therefore—appropriately, in my view—withheld part of the unitary charge, due to deadlines not being met and progress not being made. We have been informed that there is close co-operation between the local education authority and senior debt and equity providers involved in the project—as well as with Partnerships UK, the national body that handles many of these projects for central Government—in an attempt to resolve the outstanding matters. Those discussions have reached a relatively advanced stage, with a view to restarting the works.
	I completely understand the hon. Gentleman's view that there needs to be real urgency in this process, because every day that goes by is another day of anxiety and annoyance for the teachers and pupils who cannot use their facilities to the full. I am sure that the mere fact that we are holding this debate will make the point to all the parties concerned that a significant educational loss is resulting from the difficulties that have arisen. I know that the hon. Gentleman is also in touch with the LEA, to whom he has copied various letters that he wrote to the Secretary of State to make his points. It seems to me, however, that the authority is on the case, and I hope to see progress.
	The Government are committed to effective public-private partnerships because they can produce clear benefits in the delivery of public services. They can deliver assets that are of high quality, available on time and on budget, and services of an agreed standard. When assets are delivered late or services are poor, the penalties that we have discussed will apply.
	We are also determined to learn from our experience of PFI projects to ensure that as we proceed with major investment every pound spent results in high educational standards, whether lessons are taught in schools built through the PFI scheme or schools built through conventional spend.
	I look forward to discussing these and other matters with the hon. Gentleman in the future.
	Question put and agreed to.
	Adjourned accordingly at five minutes to Eleven o'clock.